An unapparent source of trouble or danger/ a hidden hazard: “potential pitfalls stemming from their optimistic inflation assumptions”.
1. Aiming too high - There is no quick way to get rich. You need to be realistic in the goals you set and do not overpromise yourself. The success in trading is the ability to follow through.
2. Trying to win them all - - Keep adding to a loser position instead of getting out. The result based on impulsive trades usually becomes a lot worse before it gets better.
3. Hoping to recover from big drawdown - Get out of your losing positions quick. It is inevitable that you get caught in the wrong end of a trending market. Always a day late and many many dollars short !
4. Don't know when to stop/check - It is time to reflect when your system loses the edge. Don't send yourself into mine fields. Take some time off and regroup your strategy.
5. Being stubborn - Don't fight the wrong fight and keep kicking yourself. Remorse about your misfortune won't changed what have happened. Trading is supposedly fun, challenging and rewarding. If you don't feel this way, please stop trading.
1 comment:
Very good list. I wrote something similar a while back on my own blog - Ten New Trader Pitfalls (http://www.theessentialsoftrading.com/Blog. Unfortunately, even those of use with nearly 20 years of experience get caught. I bombed on pitfall #1 just the other day. :-(
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