Chapter 18
Ten Beginner Trading Mistakes
In This Chapter
Spotting the signs of bad trading habits
Avoiding common strategic trading errors
Preventing lapses in trading discipline
Failing to adapt to changing market conditions
I call these “beginner” trading mistakes, but they’re made by everyone — from total newcomers to grizzled market veterans. No matter how long you’ve been trading, you’re bound to experience lapses in trading discipline, whether they’re brought on by unusual market developments or emotional extremes.
The key is to develop an intuitive understanding of the major pitfalls of trading, so that you can recognize early on if you’re letting your discipline slip. If you start to see any of the following errors in your own trading, it’s probably a good idea to square up, step back from the market, and refocus your concentration and energies on the basic trading rules.
Running Losers, Cutting Winners
By far the most common trading mistake is holding on to losing positions for too long and taking profit on winning trades too soon. By cutting winners too early, you may not ...
