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Common Trading Mistakes

  • Trading Without a Pre-Determined Trading Plan
    • You trade on the fly (“shoot from the hip”), often with no rhyme or reason.
    • Know your strategies and do your research.
  • Allowing Your Emotions to Influence Your Trading Decisions
    • You get emotionally involved with your trades allowing your emotion to overrule your judgement.
    • This can happen even if you have extensive trading education and training.
  • Not Limiting Your Losses
    • You hold on to losing positions too long, hoping the price will reverse in your favor.
    • Remember that time can be your enemy. If your position is moving against you, the closer you get to the option expiration date, the more likely you are to lose.
    • You add to a losing position in an effort to “average down.”
  • Trading Indiscriminately
    • You enter into trade positions just for the sake of being in the market at all times.
  • Failing to Conserve Trading Capital for Good Trading Opportunities
    • You hold positions in too many stocks at once.
    • You fully invest in the market and don’t leave any capital available for trading when opportunities arise.