TRADING MISTAKES

COMMON MISTAKES IN FUTURE TRADING

Summary of a post in Trading Mistakes By Jim Wyckoff

1 Failure to have a trading plan in place before a trade is executed:

Traders with no pre-determined trading plan are bound to make a mistake and that’s usually end up in a recipe for a “crash and burn.”

2 Expectations those are too high, too soon:

Futures trading are not the easy, get-rich-quick scheme that a few unsavory characters make it out to be. Before dreaming of becoming a successful full-time trader, you should first work on becoming a successful part-time trader.

3 Trading against the trend — or trying to pick tops and bottoms:

It’s human nature to want to buy low and sell high (or sell high and buy low for short-side traders). Unfortunately, that’s not at all a proven means of making profits in futures trading. Top and bottom-pickers usually are trading against the trend, which is a major mistake.

4 Riding losing positions too long

Most successful traders will not sit on a losing position very long. They’ll set a tight protective stop, and if it’s hit they’ll take their losses (usually minimal) and then move on to the next potential set-up. Traders, who sit on a losing trade, hoping that the market will soon turn around in their favor, are usually doomed

5 Over-trading:

Trading too many markets at one time is a mistake, especially if you are racking up losses. If trading losses are piling up, it’s time to cut back. It takes keen focus and concentration to be a successful futures trader. Having too many irons in the fire at one time is a mistake.