3 "Death Trap" mistakes traders make(Part 1)

1. Changing trading style mid-way a trade

This is the single biggest mistake novice traders make. They take a trade for intraday in an attempt to make profit. But as soon as the trade starts going against them they convert from an intraday trader into a swing trader hoping that the price will come back tomorrow. Most of the time the tomorrow never comes, and you will inevitably land making much larger losses, or worse still, converting into an investors from a swing trader.

Why does this happen?
This usually happens because the person is trading without a plan.
Professional traders say PLAN the Trade and then Trade THE Plan!.
Have a plan BEFORE entering the trade.

When you take a trade, there are only two possible consequences:
The trade goes in your favor or it does not go in your favor.
Your trading plan should clearly define what will be you action for both the conditions:
What would you do when the trade goes in your favor?
That means, defining at what point you would pickup the profits.

What would you do when the trade goes against you?
That means, defining your exit strategy.

Whatever you do, stick to your plan and if you entered a trade for intraday DO NOT switch to a swing trader, or worse, to an investor, mid-way in an attempt to avoid losses.

Not EVERY trade will go in your favor; you will hit losses in the way. Be ready to pick up losses. Dont trade to get your losses back from the market; the market doesnt care if you have to pay your bills or rent! If you hit a loss, close the trade and move on to the next trade.

Please post your comments.

Number 2 mistake, coming soon....


Well-Known Member
re: 3 "Death Trap" mistakes traders make(Part 1)

i totally agree with you manoj....the concept you have explained is the one that i have learnt after loss on real money....its better to get out of the loosing trade earlier and find some fresh good position according to your trading plan and following it with discipline...


Active Member
re: 3 "Death Trap" mistakes traders make(Part 1)

2 more mistake

1) They play in FUTURE market without any experience
2) They invest all of their money in stock market to gain more and then get stucked there.
Hi Manoj,

Very well summarized. However, the problem with most of the small investors or trader is that they cant see there money getting lost and then changes there mind about booking losses and turn up carrying the loosing trades. This happens with me where I am still carrying the stocks which has hit stop loss. I don't know the way to overcome this mental barrier.

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