1. Not limiting your losses
The key to trading success is to limit your losses. Your average loss should be smaller than your average win, therefore always know when to exit a trade.
2. Not taking profits
By nature traders are greedy; the key to trading success: Small profits, but consistently. Consistency is the key, because if your profits are consistent and predictable, then you can simply use leverage to trade size. Therefore you MUST know when to exit with a profit.
3. Lack of a trading strategy
Having a trading strategy is probably the single most important thing you can do in order to succeed with trading. Having a trading strategy means having a predefined set of rules you have developed for your day trading.
4. Not controlling your emotions
What are the main emotions of traders?? Here are a few: Greed, Fear, Panic, Indecision, Anger… and maybe excitement. In order to become a successful trader you have to control your emotions. The best strategies and tools are useless if you lose your head when being in a trade.
5. Overtrading
If you want to succeed in trading, then you must understand the concept of taking only the “high-probability trades” – less is more.
Many traders think that “quantity” is better than “quality”, they trade like maniacs and make their broker rich.
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