Trading can sometimes look like a simple way to make money and it might easily confuse newcomers into believing that ‘the only way is up’. But more often than not, we end up being the ones without any money left and drowned into commissions and capital calls. This, combined with the idea that frequent trading will lead to better results, can cause traders to enter positions without a clear strategy, with no exit plan and usually end up overtrading.
Going back to a post from a few days ago (see Trust Noone), I wanted to find a few basic mistakes that traders make when starting out.
Here is a good list:
It is always important to remember that confusing luck with skill is always the most dangerous mistake and that past performance is never an indicator for future performance.
Things change, fast. You need to have a clear strategy, make money and get out.