Although trading can often be enjoyable, and there are many positives to take from it, there are also problems and perils that you should always – as far as possible – try to avoid when trading. They can come from anywhere, they can be almost anything, and it all depends on our trading attitude (and general attitude, to be honest) and how we react to what’s happening around us. We soak everything up that we see and hear, even if we don’t intend to, even if we don’t realise it. And that can be a serious issue when you’re trading. Here are something to try to avoid when trading at all costs.
Watching the financial news, reading the money pages, you’re sure to find something that upsets you. You’ll see issues in shares that you’ve bought, or you’ll see that something you didn’t buy (but could have, and maybe almost did) is rocketing. These things will influence you. You’ll be more wary about your trades, second-guessing yourself even when you wouldn’t have thought twice about it before because your charts tell you it’s a good trade. It doesn’t matter how long you’ve been trading, if you read the financial news, you will suffer for it. It won’t help you, and will simply cause more issues. It’s best avoid when trading if you can, but if you can’t for whatever reason then remember: those facts aren’t necessarily all the facts. They may not even be facts at all. The news stories are there to gain views or sell copies, and that’s all. The real truth is what you can see from your charts and your trading activity. Stick with that.
Staring at the screen all day is another thing to avoid when trading. The best thing you can do is ‘set and forget’ your trades. You’ve worked out which ones to go for, and you’ve put your stop points in accordingly. What else is there to do but wait for the result? There is no point in watching the screen endlessly. That’s just going to give you eye-strain and make you nervous. It might mean that you pull out of a trade far earlier than you should. Leave it all alone and come back to it once it’s over. You’ll make much better profits and you’ll feel less stressed too.
Being greedy is a massive issue, and it’s easy to give in to temptation – but this is something you must avoid when trading. Trading is about making money, after all, and there is nothing wrong with that. And that’s why it’s easy to go a bit crazy, get a bit greedy, and trade with more money than you can really afford to lose. Why do people do this? Often it’s because they’ve had some great profits, and they feel as though they can’t lose. The thing is, trading doesn’t work in winning or losing streaks. Each trade is entirely separate, and just because you’ve done well on a few in a row, that doesn’t mean the next one will also go well. Neither does it mean it will go badly. It will do what it does despite any trades you’ve already made. Don’t give in to greed. Stick with your plan, with what works.
Something that’s ever so important to avoid when trading is having too many different trading strategies. Take elements from the ones that work for you if you like, but roll them into one plan. Or use the plan that already exists and be faithful to it. Switching between lots of different trading strategies simply confuses matters and can stop you from making a profit.