Trading Mindset: 6 Common Traits of Amateur Traders You Must Avoid
It’s your first foray into trading.
You’re excited to complete your first trading session with some profits, and hopefully, the next few too.
But in trading, it’s one thing to make some quick money and another to continue that streak. Since we all know that the secret to successful trading is consistency, you might want to avoid these 6 common traits of amateur traders:
Amateurs are emotional. It’s usually the psychological reactions that separate the amateurs from the pros in trading. Celebrate your wins but don’t get complacent and deviate too far from your trading plan. Losses can cause stress and a need for redemption but take a step back to identify and resolve the issues leading to the losses, before making your next trade. Focus on creating a strong trading plan that will help you stay consistent with your success.
Amateurs have unrealistic goals. When it comes to trading, you’d want to be realistic with your goals. However, many amateur traders will think that they can achieve more than 20% of their investments in a year. Although that happens for a few lucky people, you can’t expect to reach that number in your first year as a trader, especially if you’re still adjusting to your career. Keep perfecting that trading plan, and if you are making good progress on profits in your first year, that’s a great start and the right direction to continue in!
Amateurs think they have the best system. There’s a lot to learn in trading, and the market can shift abruptly so you need to adapt quickly if you want to be on top of your game. Your system which works great today may not be your best system tomorrow. You should always evaluate your process and adjust along with changing market conditions. Knowledge and experience will help you develop your own system that will help you in being more efficient and successful in your career.
Amateurs tend to look at the wrong data. Data gathering and analysis are crucial to the success of any trader, but a lot of amateurs make the mistake of looking only at historical data to prove their ideas. Although looking back at old data is important, you should always look for real-time data that are still affecting the market to make the right decisions during your trades.
Amateurs may be selective about others’ insights. Being a first-timer can be quite overwhelming. You need all the advice that you can get from those who already know the industry well enough. Traders who succeeded in their careers have been humble enough to take the advice of others, so you should also do the same. It helps to work with a platform with a community of traders whom you can get valuable trading advice from. Trust that every successful trader follows a set of positive habits that have helped them in their trading journey.
In trading, we all start as beginners. You can eventually move your way up the ranks and achieve success if you commit yourself to learning how to trade and embrace the advice of other traders, especially your trading mentors.
Don’t be too hasty to start live trading. You should get some training sessions before funding your account with real money. VT Markets has a great Demo programme on which you can run practice trades. A demo account allows any trader to feel the rhythm of the market and put certain trading strategies to the test so you can trade more confidently when the time comes.
Make informed decisions with the most up-to-date and reliable financial data, exclusively provided by vtmarkets.com.
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