TOP 5 TRADING MISTAKES

Dear Lazytraders,

like many of us we struggle at first and make a lot of mistakes. To prevent that from happening I will show you the TOP 5 TRADING MISTAKES. Make yourselves ready because these are the mistakes that cost you the most money.

Here we GO!

POSITION SIZING #1

This is crucial for your trading success. Most begginers fail to choose the right position sizes. They often trade too big too early.
You have to decide how much you are willing to lose if everything goes downhill.
A rule of thumb is to only risk 0.5-1% per trade.
Here is a simple example.
You want to trade Bitcoin and you only want to lose 1% if things dont play out right.
Lets say your account has 1000 USD worth of currency.
You want to just risk 10 USD thats 1% of 1000 USD.
Worth of risk : (current price - stop price) = Position Size
10 USD : (2000USD* - 1000USD*) = 0.01 BTC *We assume that BTC is worth 2000USD and your stop is placed at 1800USD to simplify things.
So you are only allowed to trade 0.01 BTC with your current account balance of 1000 USD.
Thats how you preserve your capital and dont lose too much if things dont go your way. It also gives you an opportunity to win consistently so your account can grow over time without risking too much.

RISK MANAGEMENT #2

Like I said before you have to know how much you are willing to lose in your trades. You also have to have a constant risk management in place. You cant play around with it and risk 1% today and 2% another day per trade because that would wipe out your gains immediately. Ill give you an example.
you risked 1% and gained lets say 1.5%. So youre up 1.5%. You now go ahead and risk 2% on the next trade because you are a wild unstoppable animal that can never lose. You suddenly lose that trade because things didnt go your way which can happen everytime you place a trade. Now youre left with -0.5% you actually lost money and the cause of this was your not so constant risk strategy. If you had just risked 1% you would be up 0.5% after that trade.
The moral is to choose a percentage youre comfortable with and do it consistently otherwise you will be wiped out.

TECHNICALLY INCORRECT ENTRIES AND EXITS #3

This one is also bad. If you dont have a consistent entry logic you wont have success and you wont make trading worth your while. The moment you dont know why you entered a trade you wont know when to exit it. I touched upon this topic in this Blog Post https://steemit.com/steemit/@lazytrades/3-ways-to-trade-the-markets-for-massive-success where you can see how to enter and exit the markets in different setups. Even if its just a small summary of ways to trade the market it clearly gives an inside to entry and stop logic.

PSYCHOLOGICAL FAILURE #4

You want to be hard as a rock in front of your trading desk. Dont let emotions like fear, greed, anxiety and so on get in your way because that can come with a hefty price. You have to be ice cold when you lose and follow your trading logic even if it wont go your way a couple of days maybe even a month. You have to stick to your plan if you have a reasonable one. Let me be clear on this even professional traders on wall street have 1-2 months in a year in which they lose. That is just normal. DONT GET DISCOURAGED! Be unbeatable, fearless, consistent, strong and ice cold.

HAVING NO STRATEGY #5

Now everything comes together. If you dont follow these simple rules chances are you dont have a winning strategy in place. Well if you dont, chances are you are going to lose longterm and blow your capital. That will have a lasting impact on your psychology and bank account trust me Ive been there.
But if you have a strategy where the position sizes are right, risk management is in place, entries and exits are well performed and last but not least you are unbeatable mentally you will be far ahead of the traders that lose most of their capital.
Now you see clearly that every point mentioned above goes hand in hand. You wont have so much stress if you for example know that you can just loose 1% of your capital. You searched for good entry points to increase your chances of winning. You know when to get out and dont have this feeling of uncertainty. Every bit of your strategy works together and thats the beauty of it. Thats why there is not one point on this list which is more important than the other.

I hope you learned something and look at your trading strategy like a moving clockwork.
Because it really is one.
Dont forget to Vote, Share and follow there will be a lot of valuable content like this in the coming days.
See you next time!
LAZYTRADES