There are countless number of traders present in the market. But only few know about the trading psychology. There are countable number of traders who have trading psychology plan and only few people who follow their trading psychology plan. With out a proper trading psychology, many traders are bound to commit many mistakes. Here are few mistakes listed, they are:
- Failing to have a proper trading plan: Many traders do not have a proper planning. Without proper planning, they fail to enter and exit from trade at the right time, they do not know when or where to do trade and how much money can be lost or made.
- Improper money management: The traders without proper trading psychology, do not know how to manage money properly. They are always confused and are always haunted by questions like, how much money should I put in trading? How much surplus is required to make profits? How to do trading with less amount of money?
- Failure to take proper decision while buying and selling: Due to the lack of knowledge of trading and psychological factors that effect the trading system, they are unable to take right decision in the right time. Using protective buy stop and sell stop are the best way to make appropriate profits.
- Having too high expectations: Due to the lack of knowledge of trading psychology, traders set their goals with high expectations, but they may not know which can be accomplished in right time. Expecting too much profits is not the quality of a good trader.
- Losing patience and getting emotional: Traders most of the time lose their patience and get emotional while they are trading. A trader with good knowledge of trading psychology, should possess much patience and should not get emotional. They need to control their emotions. It is very much necessary for a trader to have patience and control on emotions.
- Failure to accept loss: Due to the lack of trading psychology, most of the traders fail to accept their loss. A trader needs to accept his losses which arise from his own actions. Whenever, trader accepts his losses, it helps him to know and identify his mistakes.
- Doing over trading: Without the trading plan, you can not ensure that your trading is going in the right direction. Without proper plan, trader may often do over trading and over trading can cause huge losses.
The above are the common mistakes which a trader generally commits, if he does not have a proper trading psychology.