Trading is 90% planning, 10% holding on for dear life. In this meme stonk world, even the best of us have made these mistakes:
1. Not having a plan: The #1 mistake most traders make is not having a plan or not following one.
Try this instead: Avoid FOMO by setting up a paper trading account to simulate buying and selling without risking real money.
2. Overtrading or revenge trading: You make a few good trades, have a decent P&L and instead of calling it a day...you continue trading. Before you know it, your P&L is in the red, you’re getting emotional and doing revenge trades (i.e. forcing trades after a big loss).
Try this instead: Follow your stop loss plan, step away from your trading to regain control of your emotions, and if necessary, reassess your trading plan.
3. Scaling up too fast: Your P&L is up $200 a day, you get cocky and decide to add a zero to the end of that position. The problem with scaling up positions too fast is that it involves a lot more risk and stress that we're ill equipped to handle.
Try this instead: Stick to the original plan. Put aside a certain amount of money to trade each month, increase it incrementally over time to allow yourself to prepare for proportionally bigger losses, and minimize emotional trading.
For more investment knowledge and trends, welcome to Courses in the Community.
