1. No trading plan
Know when to buy and when to exit with a profit or a loss. You must find a method which gives a trading edge, you must verify that it works and you must take the signals the method offers
2. No money management
You must know how much you are going to lose if you are wrong and how much you will gain if you are right. You must know the odds of success. You must know how much to risk as a percentage of your capital so if you lose you will have enough capital to recover.
3. No protective stops on your position
You must draw a line in the sand as to how much you are willing to lose on your trade. Your stop loss is like an insurance policy against disaster.
4. Taking small profits and letting losses run
You must cut loss quickly when wrong and ride your winners. These will take care of your small losses.
5. Overtrading
If you risk too much in relation to your account you risk everything on one trade. Risk only a small percentage say 5% on any one trading idea.
6. Fighting the trend
Trend trading is the easiest and most profitable method of trading. Swim with the current of the market. If you swim against it you may drown.
7. Changing your strategy while in a trade
Never move your stop to give your trade more room. When your stop is hit, you are wrong.
8. Lack of patience
There is always opportunity in the market for those who wait for it. Jumping in and out of the market is for the gamblers, not the traders.
9. Averaging your loss
Add to a winner not a loser. If your position shows a loss you are wrong. Get out and wait for another opportunity
10. Letting your emotions cloud your judgment
Keep your head when all are losing theirs
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