Do you ever wonder if you secretly want to fail? It’s hard to believe, but some people do want to fail. They may not want to do better than their parents, and secretly, they set themselves up for failure. Others fear success. They associate success with added responsibility, and they want to avoid responsibility at all costs. But if you’re like most people, you want to succeed. For whatever reason, however, you find you make trading mistakes that result in losses. There are times when you are your own worst enemy.
There are a number of ways that you may be your own worst enemy, but here are some common ones.
Many novice traders risk money they can’t afford to lose, and understandably, feel on edge as they execute and monitor a trade. You can’t concentrate very easily when you are agitated. In order to trade calmly and rationally, it is vital to trade only with money you can afford to lose. In addition, it is important to manage risk, so that you minimize the amount you can lose on any single trade. If you truly have nothing to fear by losing, you’ll feel more relaxed. You will trade effortlessly, and you won’t make as many trading errors.
Don’t miss sleep. When you’re tired, it’s hard to concentrate. When you are worn out or tired, you are understandably ready to lash out, or feel extreme frustration, even when you face a minor setback. Concentration requires energy, and you don’t have adequate energy to trade when you are tired. So get the sleep you need to stay alert and ready for action.
Don’t trade by the seat of your pants. Many novice traders don’t map out their trades in enough detail. They don’t decide beforehand where to enter or where to exit. When they actually try to execute the trade, they find it difficult to stick with their trading plan because it is unclear and difficult to follow. They don’t know exactly what to do and when. And so, they panic at critical moments of investing. Carefully outlining a plan and following it will help you avoid costly trading errors.
Trading is hard enough. You don’t need to sabotage your own efforts. By trading with money you can afford to lose, staying calm and rested, and by following a well-defined trading plan, you can stay at the top of your game and take-home profits.