Day trading is tough because there are so many factors to consider. From my experience, these are the most frequent mistakes I think most new traders make:
No Trading Plan: A well-defined trading plan is vital. It should outline entry and exit strategies, risk management rules, and precise trade criteria. Without a plan, emotions can hijack logic, leading to impulsive decisions.
Overtrading: New traders often fall prey to overtrading, taking too many positions, or investing too heavily in single trades. Moderation is key.
Chasing Losses: Don’t chase losses! This “revenge trading” fuelled by emotions often leads to even more significant losses as rational analysis takes a backseat.
Ignoring Market Conditions: Ignoring broader market trends, economic data, and news events can be costly. Understanding market conditions helps avoid trading against the prevailing direction.
Emotional Trading: Fear, greed, and impatience can cloud judgment. Emotions can fuel trading behaviors such as exiting trades too early or late, clinging to losing positions or taking unnecessary risks.
Good luck!
