When you read themed books and magazines, you often get to-do lists and instructions on how to make things right. Today we’ll channel the attention to your worst habits you may not even notice. There are top 4 self-destructive moves you often do. Eliminate them and you’ll be one step closer to your goals.
- A wish to control.
- 100% conviction you know the future.
- “Death by a thousand cuts”.
- Stupid trades.
Find your own trigger of when you need to relax and let things slide. This need to control everything and be in charge can play a trick on you. It’s often traced in other spheres but here you put your assets at risk. The need to control comes along with fear, anger, and the spectrum of other emotions. As you may already be aware there’s no place for emotions in this business. You need to learn how to keep them out lest you face serious damage.
- Ending deals before they play out;
- Exceeding the risk capital;
- Non-stop trading to cover up the losses.
You don’t know the future
In case you noticed you have the 1st habit, think and find out whether it’s accompanied by the 2nd one. They complete each other so you should cope with both of them. You should get rid of being too self-confident as it’s a very dangerous path that leads to all kinds of losses. At any time, the market may go crazy and make you face the unpredictable results. Once you apprehend that anything is possible, you’ll eliminate the misleading belief and step on the path of growth.
Death by a Thousand Cuts
This is by far the least acknowledged problem in trading. The figure of speech mostly defines that many tiny problems can lead to a complete flop. So, let’s get to the bottom of it.
A smaller loss than the previously planned one seems reasonable and should save your money. Many traders use this strategy. Unfortunately, it often leads to complete bankruptcy. It’s partially supported by other bad habits like knowing 100% for certain what’s going to happen. Curious enough, you end up closing the deal sooner than it works out just because you think you know the outcome. Such a belief decreases your possible profit a lot and in combination with emotions leads to a disaster.
One possible resolution is to keep in mind: don’t prove your trading plan wrong until the market does. If you don’t know how the idea will work out, you’d better start small and let it play out. Otherwise, you’ll keep doubting yourself and your skills. Mind that this rule can’t be applied to stupid trades.
- Each stupid trade takes you further away from success.
- It almost always leads to losses (big and small) but now you know how hazardous even small “cuts” are.
- There is no way it’ll help your strategy.
Effective trading is hard, there should be no illusions about it. One needs to have patience, notice details, know how to analyze the news, etc. Only the most patient and disciplines traders become wealthy sharks. If you wish to join this elite society, you should get rid of the habits we’ve discussed. Some people say that it’s impossible to get rid of habits but it’s very likely you can substitute it with another one. Add a useful habit or two to your routine and boost your efficiency. Perhaps, it seems like a small step but it’ll take you far in the long run.