#TradingMistakes101 Trading Pitfalls: Critical Mistakes Costing You Money
• Absence of a Defined Plan: Executing trades without a structured, documented strategy invites chaos, inconsistent entries, and costly errors.
• Overleveraging Positions: Using excessive leverage amplifies gains and losses, increasing risk of margin calls and account wipeouts.
• Neglecting Risk Management: Failing to set strict stop-loss and rigorous position-size limits exposes capital to uncontrolled, unnecessary drawdowns.
• Chasing the Market: Jumping on late-stage trends often results in poor entry points, suboptimal exits, and eroded returns.
• Emotional Decision-Making: Allowing greed, fear, or hope to drive trade decisions undermines discipline, consistency, and long-term profitability.
• Overtrading Frequently: Excessive trading raises transaction costs, fatigues the mind, and clouds judgment with market noise.
• Ignoring Fundamental Analysis: Disregarding macroeconomic, sectoral, and company-specific data limits your strategic edge and risk awareness.
• FOMO-Driven Entries: Succumbing to “fear of missing out” invites impulsive, high-risk positions with inadequate planning.
• Overconfidence Bias: Assuming infallibility after a winning streak leads to reckless sizing, poor risk controls, and potential blow-ups.
• Lack of Performance Review: Skipping regular journal analysis and strategy audits stalls continuous improvement and perpetuates repeating mistakes.