Many traders recognize a good catalyst or setup when they see it…
That’s the easy part about trading.
The hard part is staying disciplined enough to stick to a trading plan and manage emotions.
And being consistent with it.
It requires mental fortitude and guts.
If you’re out there trying every day, this message is for you.
I’m going to share with you two of the most common mistakes I see traders make…
Because they’re probably the same two biggest issues preventing you from reaching your trading goals.
So if you’re ready to strengthen your emotional muscles and cut out costly mistakes, read on…
The Two Mistakes Holding You Back
Once you can overcome these two mistakes, your whole trading game can change.
And read to the end, because I will share a cheat sheet to help you get your trading on the right track NOW.
But you still need to execute your plans and manage emotions, so don’t skip over these mistakes you must avoid…
Adding to Losers
When a trade idea doesn’t work, a lot of traders get stubborn. They struggle to cut their losses…
Maybe they’re scared to lose money. Or can’t accept when they’re wrong.
Or they’ve heard other traders say they like to give a trade ‘more time’ so they try that too…
And they keep holding. And holding…
Then they add to a loser to bring their average down…
Does that sound like you?
It’s a slippery slope.
Before you know it you’re in a losing trade with a large size. And it makes you more reluctant to cut it and realize that loss…
We dug deep into that subject on this episode of the SteadyTrade Podcast.
And those habits will never get you on the path to being a consistently profitable trader.
First, accept that losses are a part of trading. Taking small losses is completely acceptable — especially if you cut a trade that’s not working at your preplanned risk level.
Second, never enter a trade without knowing where you’ll exit if it goes against you.
And third, trade with such a small size in the beginning that the loss doesn’t matter.
That will help you build the discipline you need to cut losses once you find consistency and slowly increase your size.
The second biggest mistake that’s costing you money is…
Revenge Trading
Many traders try to make back losses after they take them.
I get it — losses suck.
Nobody likes to lose money.
But if you took a small loss as part of your trading plan, there’s no reason to force trades trying to make it back.
If you’re using the right risk to reward in your trading plans and focusing on the highest probability setups, your next winning trade will wipe out your small loss.
Part of what feeds into revenge trading is that traders want to make a lot of money — RIGHT NOW.
But that’s the wrong mindset.
Yes, you can make a lot of money in the markets. But you can’t rush it.
You have to take what the market gives you. And be patient enough to wait for those high-probability setups. Then trade them the best you can according to your plan.
If you can keep your emotions in check and execute trades without thinking about money…
You’ll be well on your way to stringing small wins together and building your account over time.
And that’s the only way to do it. There are no shortcuts — you’re going to have to put in the work.
But a cheat sheet can help — click here to get it now.
Have a great day everyone. I’ll see you back here tomorrow.
Tim Bohen
Lead Trainer, StocksToTrade