After the initial excitement of making some money, most traders find they eventually encounter a lot of problems that seem to contribute to an endless losing streak. Being aware of the possible problems that might arise would help the trader avoid making mistakes or at least limit the risks, thus minimizing losses.
What To Watch Out For
The following are some of the more common mistakes the trader should be aware of to be able to consciously avoid making them and contributing to the losses:
• Most serious traders would usually start out with some sort of plan on how they envision their trading exercise to be. However along with the excitement of this very nature of trading, comes the adrenalin rush, that sometimes causes the trader to lose sight of his or her initially designed system and this can be very dangerous indeed. Not being able to stick to a re designed system would contribute to taking unnecessary risks.
• Some traders fail to have “safety” measures incorporated in their trading makeup style. Incorporating elements such as using sell or buy stops features will normally help to limit any losses while maximizing profits. This is especially useful when the trader is away from the trading station or when emotions are dictating the decision making process.
• Being too rigid in the way the trading exercise is run is also not a desirable style to adopt. Being open to new ideas and systems that could help to enhance the profit making positions would be better as there are always new and more innovative ways being designed. As the market trading styles and ideas
change the trader has to stay abreast and knowledgeable to such movements to ensure the competitive level is still retained. This will help to improve the trading results for both the new trader and the more experienced one.