Mistakes I Made as a Beginner Trader and Lessons Learnt

It is no lie that a large percentage of traders quit trading after they liquidate severally. One thing a trader does daily is to learn. As a trader, you learn from other traders’ experience, from your experience and then you combine them together to give you what you can work with. While you learn, you start to build your trading plan. As a trader, I have made a lot of mistakes and I have learned from them. In this post, I will be giving you a little guide into what I have learnt and my experience as a trader.

The Beginning

I started trading not too long, about 3 years ago. While I am not a professional trader as I will not like to attribute professionalism to myself since I still learn a lot, I will describe myself as a fast learning and growing trader. I started learning trading like a child who just started learning how to work. My first trading in futures was a woeful one and then I knew I had a lot to learn.

Just like every other person, I was told that traders are millionaires in dollars and they are able to make money withing few minutes and just live their lives in their ocean view homes or spend holidays in luxurious hotels where they make money and spend money by just picking that a market will rise or drop. This must really be a good profession but then my first trade threw me off my stand and I crashed hard.

Why I wanted to Start Trading

I was and I am still in so many financial problems and I needed a way to get myself off the debt hook and since my friends told me that traders were money making machine who mint money in their rooms, I decided to join the association and buy my own ATM machine in my room.

I intended to pay off my rent and then use trading as a tool to build multiple source of income which will help me to live to my taste but then for me to be able to do what I wanted, my ATM machine needed to start running.

My ATM Machine dispensed Blood

My first trade was very red. I could not tell between my trade position result and the color of Mars. I first trade was woeful; it was a choice made from a guess. You know those guess trick like Mini Mini Mani Mo… Yes, I did that a lot and unfortunately, I was liquidated at each trade. Soon, I got tired of liquidating, and decided to look deeply into why some people are making money while I am losing all my spare money.

Learning Began

I had to contact a few professional traders whom I pick classes with them at different intervals. I had to pay, since most times, learning isn’t free and trust that when it is free, it cost something. I had to pay to learn how to read a chart, ho to understand a chart, how to identify chart patterns and so on. A lot for technical analysis you would say. I had to learn from different people and fortunately enough, they all have different trading strategy they followed but they used the same rules. So I learnt from different people and I am still learning till date.

Mistakes I made as a Beginner Trader

The first mistake I made was Over trading. I did this because I felt I knew a lot of things from different people and the zeal to make money was pushing, so I was willing to trade everything and anything that had a chart. I would trade up to 6 times in a day and my adrenaline will be high and I will be willing to trade again. When I realized I couldn’t trade the market at all places, I decided to go back to my drawing board to learn about overtrading.

Mistakes are always numerous when dealing as a new trader so it is important that you learn from them. Another thing I did was always looking at the trade and giving a lot of hope on my trading decision that I will be forced to adjust the stop-loss when they were about to be hit. Every time I moved my stop loss away from its previous point, I will regret my action and wished I never did such so I decided not to move the stop loss, instead I decided to just let the trade play out and learn from them.

Using large amount and high leverage was another mistake I made but was I wrong for doing this, I saw a lot of trading group on Telegram and most of them usually use a leverage of 70X, 100X and so on, so I decided to give it a try and it wasn’t a good idea for me. I lost most of my money like almost immediately with no option of redemption. With this, I learnt to just be calm while trading and just trade with little leverage and not large amount I could not lose.

Lessons Learnt

Trading is not a 100 meter race which you need to rush in and out immediately, Trading is an unending Marathon with several 100 Meters, so you should take your time and trade what you are certain about instead of trading all the time.

Allowing the trade to breath, reduce the tension from you and allows you do other things which would be productive. Since the market isn’t a straightforward moving price, you should expect that the market will go up and down while moving in its direction. For the sake of your sanity, it is good to let the chart play itself.

Financial management is very important when trading. Since you are in a business of money and you need money to remain in the business even when you lose money, it is good that you stop-loss, is position well, risk-management is properly analyzed and so on.

Final Note

When trading, a lot of people just trade with the aim of getting money, when you trade without a proper plan and strategy, then you are gambling. Gamblers lose a lot of money, but when the trade is well organized, it is not gambling. Never trade without a plan, this I learnt early in my journey.

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