Topic: Common Mistakes people make in Trading (Read 1291 times)

Stop-loss in spot trading is mostly used by scalpers and day traders because they can't have their capital stuck on a trade just because they have bought it and it went down because they need the funds to make more trades. So if a scalper buys a coin or a token with $500 aiming to get maybe $10 to $20 from profit from it but it starts going down instead of going up, in that case, if they don't have a stop-loss, they will have their $500 stuck in that trade.

So what they do is buy the coin or token, and immediately put a stop-loss on it so that if it starts going down, their assets should get released after bearing a small amount in loss.

This is usually done by experienced scalpers and traders and those who make a lot of trades every day and they know they can recover the amounts they lose in the stop-loss. Such practices are not recommended for beginners or those with a small capital.

6. Overtrading

On the moment that you do find yourself become profitable then still deciding to trade and forces out to make profits then usually people will really be ending up
on losing the profits that they had gained earlier. Why? On the time or moment that you do make up some trades then the main priority that you do have in mind is on how you would really
be making even more money on which this is the moment or time that you will be not thinking up that much or you would really be derailing into your plans.
On the moment that you do become that greedy then this is where issues becomes that too obvious or you would really be definitely be having those doubts.
It would really be that important that you should really know on what you are really that doing and be sensible and stick into your plans and dont let your emotions control you.

Being principled and having understanding about trading is one of the qualities of a good trader, it helps to put yourself and everything in place. Trading doesn’t tolerate mismanagement of your assets or emotions else you risk losing your money. Trading is a risky activity that requires proper understanding to be successful but a lot of people see it as an easy and fast way of making money but it is not that easy, there are whole lot that you must understand before you can think of success in trading, rushing into it will only rush you out of it because it will be difficult to predict and interpret market conditions and also understand the best time to hit the market.

You can also refer to it as revenge trading, it is a very bad practice by traders which does not mostly end well it most of the times end in losses. Every trader must learn to control their emotions if they want to be successful in it, chasing after your lost money is wrong and it is a sign that a trader doesn’t have their emotions in check. Trading requires patience and involves taking calculated steps with the mindset of profiting or losing from it. People chase after their losses because they invested more than they can afford to lose and it is also a bad practice.

Having stop loss in case things do not go the way you want it to go is something you can definitely benefit from by using it carefully. You can't make it too tight because then it would just keep selling and it would be bad, but you can't really do much if you make it too low, in that case you would lose too much before stop loss gets in the way.

I think the best case would be just making sure that we deal with the right amount of stuff, and finding that right amount depends on the coin as well and how much you are willing to wait for a recovery as well and what kind of trade you are doing as well. When you bring all of that together, you are going to end up with a much better result without a doubt and you will not lose much neither.

Quick money doesn't last because you didn't learn from the mistakes that you should be making while you try to become great at trading. After making the money you'll still be making the common mistake that'll make you lose the money hence going after quick money isn't a good way to make money. Learn and practice until you become great at trading so that when you're making money, it can last in your hands and from the money that you have made, you can do other investments that'll keep making the money to not finish. Learning how to trade and be quick to want to double your money is going to make you lose focus and become more interested in quick profits. Don't believe influencers because they're being paid to influence hence most of the things that they're saying are because of their partnership with the altcoins that they're advertising and not because they want you to do very well in trading.

Exactly. A lot are actually trading like gambling, and they will only realize that if they turn all their capital into losses and instantly lose everything they have.

However, despite how many times this kind of topic has been raised in the forum, still there are traders even if they know that they are doing the wrong things in trading, pursue what they have started wrong. And regret in the end because they fall on greed and on their emotions instead of trading the right way.

Beginners are coming in trade to make double their money in short time but don't understand about trading, if this is their mindset then they will lose everything at the end of the day. Try to find good mentors of course videos can help to learn trading and those are real influencers they will warn for newbies traders who wanna start trading, now video tutorial is the best way to learn in trading.

2. Emotional Decision-Making
8. Chasing Losses
11. Trading with Money You Can't Afford to Lose
10. Lack of Discipline

All of these things are really just that the same on which this one pertains about emotional control and discipline on which this is really that important and if you do find yourself having
issues in regarding to this then it would really be a tough one for you to survive into this volatile market. Its really that important that you should really know on what you are doing.
Mistakes might be inevitable but it doesnt mean that you cant be able to learn. It will really be just that depending on self learning and acceptance.

The more experience you had gained then the more established you would be into the things that you are really that dealing with. It is really just
that depending on a how a certain individual will really be making out such thing. It will really be that important that you should really know on what you are
dealing with and never expect too much positive things to happen. Be versatile then you should really be just that fine.

TA might not be working for you but it does not mean it is not working for others. If TA was not worth it, we would not be taught how to analyze the market using it when we were learning how to become a professional trader. TA tells you how the market is likely going to react and you can decide based on that information if you are going to follow what your analysis is saying or ignore it. You do not just use one analysis to make your judgement. The market direction can depend on what happened in the past because alot of traders are depending on the past reaction of the market to make their own decision. You can not tell me to ignore TA and be following our mind. Both of them can be wrong but you learn something new when you analyzed the market and I always do this before I start trading.

If the context of the discussion is the spot market then of course stop loss is not used, I also do not use this feature in my weekly allocation of Bitcoin, but if we talk about other types of trading such as futures or forex then clearly I think stop is a risk management that is very necessary to apply so that we avoid significant losses.

You have said the correct scenario by increasing the amount of allocation when the market is bearish because the concept of trading is to buy when the price is cheap and sell when the price is bullish, and for the issue of assets I think it always depends on the trust and confidence of each person, for me there is usually no other asset that I would choose other than just bitcoin. One thing, as you said, make sure we buy it with an amount of money that we can be responsible for whatever the results are, and also try to only use cold money so that your mental and psychological state can be better maintained.

TA is probability calculus at best, but in most cases similar to using a crystal ball or tarots. I believe that most people see what they want to see, and use only indicators that support their feeling about the market. They adjust their TA and chart based on their needs. And even with people who use it for calculating the probability; one could ask if the past market information even can be used to predict the future in any kind of accuracy. It's like predicting a coin toss from the past throws, because when you are calculating the probability, next throw has always 50/50 change, no matter what the history is.

And i bet my left eye that any experienced trader has plenty more failed TA predictions then successful ones.

You don't need to use a stop loss if you don't make stupidly risky bets. Especially if you are trading on spot, there is absolutely zero reason to use a stop loss. Just don't buy more than you could afford to lose and if you believe in the asset add more as it goes lower. If you think the asset is crap and you can't afford to support it with more money as it goes down, then don't buy in the first place. Buy buying it from the current price, you are making a decision which says "the asset is good, I like it" So if the price goes lower, you should be buying more because it is a good asset for a cheaper price now. If the asset is crap, why buy it in the first place?

Of course trading requires knowledge and skills, profit always depends on how much knowledge and skills you have, but to get all that, someone must first go through an adaptation process for maybe a few months or even years with every characteristic owned by each market, meaning that it is impossible for a trader to immediately have such knowledge when they are still beginners, because knowledge will only be obtained when someone has tried.

And as you said about stop loss, where of course you also agree that not a few traders do not apply stop loss when they are running a session, and most of them may be beginners who do not know much about the importance of stop loss to the security of money in their balance.

It's all about knowledge and experience. A trader needs knowledge and experience to be able to execute their trades in a way so that they don't lose the capital they are using for that specific trade by using risk-management techniques such as stop-loss. Believe it or not, not every trader can use stop-loss efficiently. You will find a lot of traders who might be using the option but it isn't always effective for them.

The parameters that one needs to set for options such as stop-loss to work require one to have ample knowledge about the market and its movements. If you don't even know what you are doing, you wouldn't know how to set the parameters for your stop-loss to work efficiently and save you from excessive losses or bring you maximum profit.

Everything has it relevance in trading because they can be used for guidance for you to have a good result. Analyzing the maket with TA which is what it is used for, would not make you to be capable of predicting the exact movement of the market biit it can guide you to make a good decision. You will have an idea of the market is moving up or it is falling down. At times, the predictions can be exactly what you got and if you did not modernized your analysis, you win for that trade. Not analyzing the market before trading is a big mistake, make use of TA and get a better view of the market before you ruin your account.

And here comes 8. Chasing Losses on which on the time or moment that will really be experiencing some loses then this is the time that they will really be just that making it just like when doing gambling
and this is basically a thing that shouldnt really be done in the first place because this would really be that definitely be resulting into that kind of approach on which that it is really that similar to gambling.
On the moment that you would really be having those losing positions then you would definitely be mainly thinking on how you should really that make out such recovery on which we know that this isnt something recommended on this kind of condition because you will really be thinking about on getting back those loses on which its obviously that this is really that a very common gambler behavior.

Never ever make out such behavior or condition on which this is basically where some gamblers been doing, and this is why on the moment or time that they would really be  that experiencing
a series of events like losing positions then they would really be that become impulsive on this case and this is really that something not that recommended to do such acts.
You would really be finding out yourself on much tougher situation on the moment that you will really be losing up control in speaking about financial management on which this is something
which is really that very crucial among all.

Honestly, I don't agree to say that trading is not difficult, because whatever I feel and what I also hear from some people involved in the world of trading, they say that trading is a difficult and complicated profession to do, and I really feel it when I have to prepare various things where the most difficult is maintaining consistency related to the willingness to continue learning and also another difficult thing is managing yourself and emotions.

On the other hand, of course I agree with the idea that doing research first before we jump into something is an action that must be done by anyone and in any field, because with this you will be able to measure your abilities and this is also useful for making you know what to do and what to avoid. Another thing about greed that you said, yes that is also included in a big mistake in an activity that involves money and risk, but I am sure that when you know and understand about a field that you are working on, I think it is unlikely for you to act greedily.

Every trader believes there is a perfect time to buy and sell, you don't have to be successful trader for that. In fact that's the sole reason why people even trade, becayse they believe that they know when to buy and sell. And waiting for a sell, isn't really a skill imho. It's just waiting. Some people wait because they are afraid to sell and they turn to investors instead. Waiting for the right time to buy can be because of being afraid as well. But it's not about waiting, but about timing. It's about following your plan, and sometimes acting fast or "panic selling" is actually worth it, if you sense that people will dump it more.

I know this could seem controversial to anyone who is "believing" the relevance of most TA indicators, but imho selling in time and buying in time is rarely because of research anyway, because there's really no way you can even prove you have beat the market by analyzing it. Especially when it comes to day trading.

Not being able to control emotions when trading of course will make it difficult for someone to make the right decisions when trading because with emotions someone will trade in the hope of making a profit but they do not do any analysis on the trading they do which of course they will not be able to make the right decisions when trading.

I think everyone has a strategy that suits their abilities and of course they will be able to make a profit from it and anyone has ever experienced failure when trading and those who can learn from the mistakes they have made and fix them and no longer repeat the same mistakes when trading again.

That is the attraction and also the pitfall of trading. beginners in trading are very eager to make money quickly. watching videos may provide knowledge related to the trading process or may show how to analyze the market. but the video will not explain how risky trading is for a beginner. maybe some video makers give warnings.
There are many aspects to learn in trading before a beginner tries their first trade. I will not say long-term trading will be less risky. because, for a beginner who is inexperienced, it is still very easy to move their mind.

For those who want to start trading, it may be better to find a mentor who can guide them first. videos may help but will not be optimal in providing experience and learning.