Most Common Mistakes Traders Make

So you want to become a successful trader？ You are going to have to avoid making many common mistakes that traders often fall victim to. You are going to make mistakes as you learn to trade, but the traders who actually start making money are the ones who learn from those mistakes and figure out how to stop committing them over and over. In this article, I am going to discuss the most common mistakes that traders make and give you some simple solutions to them.

1) Being in Too Many Trades at Once and Over-Trading

This is the most classic mistake that 100% of beginners make and about 90% of the rest make. It is no surprise that about 90% of traders lose money over the long-run when about 90% of them are trading too much.

Most people simply cannot learn to ignore the temptation to constantly be in a trade, so they make up reasons to trade or they make up trading signals that are not really there. The truth is unless you learn to control yourself and stop over trading, you are never going to make consistent money during trading the market.

Perhaps the quickest and easiest way to train yourself to stop over-trading is simply to change the way you think about trading and what “making money trading” actually consists of. Once you know that, you will literally make more money by trading less.

2) Spending Too Much Time Thinking About Trading and Looking at Charts

Generally, over-trading means a trader thinks too much about trading. Traders often make the mistake of spending too much time looking through the charts over and over, even when there are no trades. As a result, they enter the trades which they wouldnt normally take if they were following their trading plan.

You must build in your trading plan and the regular schedule time when you will be away from the charts. If you start deviating from the process, you will likely end up losing money as a result. It comes down to how good you are at staying disciplined and sticking to a plan, which is why most people lose money at trading; because they simply cant stick to a plan and stay disciplined over a long period of time.

3) Trying to Make Trading Decisions From Short Time-Frame Charts

One of the biggest mistakes that new traders make is day trading. Many people hear about “day trading” before they learn more about it. This misleads them down the path right from the start, leading them to a cycle of trading short-time frames like the 5-minute or 1-minute charts, which cause severe over-trading and gambling.

The higher the time frame, the more data it reflects. So it carries more “weight” than a short time frame. A daily chart bar is far more important than a 1-minute chart bar. You need more patience to trade higher time frames, but in return you are getting more reliable trading signals and less stress! When trading daily charts, you can simply set up a trade, walk away and enjoy the lifestyle that trading can bring.

Successful trading is 50% psychological and 50% strategy. Most people lose trading when they are not able to manage their emotions, such as

· Fear to lose profits or money.

· Being greedy and not taking profits.

· Taking too many trades and over trading.

Trading is always a passion for me and the chance to teach others is something I love. That is what motivates me to excel in my long term goals as an international speaker, educator and professional trader.

[Tai Jin Dao]

I have always been involved in the financial market and have been trading Forex for more than 10 years. This has led me to own and manage two companies:

· LCMS Traders, an education company with more than 400 students across South East Asia, where we teach and coach them on how to trade profitably.

· ForexBriefcase, a multi-million dollar investment company with a professional trading team managing a Managed Account Fund with the aim of generating monthly returns for clients and investors.

I also regularly share my trading ideas and concepts at events internationally, recently as a resident speaker for reputable brokers such as SamTradeFX, and leading Forex media company such as WikiFX in Kuala Lumpur and Ho Chi Minh City. I am absolutely convinced that it is possible for traders to make money in the FX markets.

My greatest success is personally developing both a manual and an automated trading strategy which is able to generate high probability trades for steady and profitable capital growth. However, as with any trading strategy, patience, discipline, hard work, consistency and positivity are required to ensure continued trading success.