Awareness of what you don’t know is the most important step in any trading education. It is crucial to learn what to avoid and how to deal with our weaknesses when trading. Let’s take a look below at common trading mistakes and the consequences. A common error in trade education is to have unrealistic expectations of trading. The emotions we experience from the market fall into one of two categories: fear, or greed. A person who is greedy can have unrealistic expectations regarding trading.
An example of this is the $10,000 account that many new traders use to expect to make $5,000 each month. This is not realistic. The trader who hopes to do this hasn’t considered the returns experienced traders make. A return of 8,549% annually would be a return for fifty per cent each month. Ever heard of someone earning that much money on their own money? Pros make anywhere from 100 to 200% per year. A net income at the end the year of 241%, or 11.8% per calendar month, is considered quite respectable. This is much easier to project.
Greed, combined with stories of incredible results, can cause us to have unrealistic expectations. If you are realistic, you will be more likely get to where you want. It takes time to learn trading. It’s not hard to make a profit by doubling your annual income. Over the course one year, progressive gains add up. Remember to look at longer time periods. When you think about the longer timeframe, you will feel more relaxed in the moment.
Another mistake made when we don’t know our weaknesses is making a guess about what the patterns and charts mean and then taking action. This can also happen when you use indicators that aren’t completely understood. These are the decision-making instruments you use to make money decisions. Be sure to understand your trading environment. Don’t under-estimate your trading capabilities.
Trading hunches can be described as acting on intuitions. This is when you feel something. It is possible to feel right sometimes, but for new traders it will most likely be the voice in your ear: the need to make the trade; feeling right; or something you have overheard whispering to your ear. The indicators you trust are your decision-making guidelines. Don’t ignore the rules and follow them. Trades that Certus Trading Review are too optimistic can put you at great risk. This error is often made when you believe you have the markets figured out. It is better to stick to solid data. Keep in mind that this is a game based on probabilities. If you use good information properly, it will increase your odds of winning.
Being aware of what we don’t know requires asking a lot questions when first starting a trading education. If you don’t stop struggling and ask questions, or seek help, then you’re likely acting out of pride. People desire to be Superman. However, their pride prevents them asking the stupidest questions. If you suspect you may find yourself in this situation, the first thing to do is ask yourself: “Are we here to make some money or be nice?” There are many options for trading educations, so forget your pride. Instead, let your results speak louder than your vanity.