Top 10 Common Trading Mistakes

We all make them. Here are the Top 10 Common Trading Mistakes:

1. Greed. This is the killer.
   Solution: Plan the trade and trade the plan. Be happy with reasonable returns. Take the money and run.
2. Reversing Your Position.
   Solution: Exit a trade according to your trading plan, not because you got spooked out.
3. Trying to Pick Bottoms and Tops.
   Solution: If you did, you got lucky. Just go for part of the move. It’s ok to leave some for others.
4. Lose Your Cool.
   Solution: Good trading is boring trading. Plan your trade and trade your plan.
5. Waiting Too Long to Pull the Trigger.
   Solution: Continually study charts and paper trade to develop the confidence. Just do it.
6. Letting Losses Run.
   Solution: When the market tanks, cut loose and preserve what you have left.
7. Avoiding Stops.
   Solution: At some point, you need to recognize a bad trade, even if you’re down 50%.
8. Following the Crowd.
   Solution: They don’t know any better, why follow them? Be secure in your own thoughts.
9. Too Many Open Positions.
   Solution: Stay focused on no more than several manageable positions.
10. Not Doing Your Homework.
    Solution: Whatever your strategy, ensure your position is justifiable. Know your stock.

Being aware of these conditions is your first step to overcoming them. Stay detached and good trading to you!