Smita Parekh 27th Apr, 2019
Self- sabotage means the act of creating problems for one-self or self-harming, which creates problems in our life & interferes with long-standing goals. And what is a mistake? A mistake is when we do not follow our own written rules. The most commonly made mistakes made by a trader in the market are when they do not follow their own written trading rules, & go against it, this leads to self-sabotage. When one begins to trade, a working business plan is developed in order to guide them while trading. Numerous rules are required to be followed. If you don’t develop such rules, everything you do will be a mistake, & you will begin to feel that the markets are going against you.
There are numerous number of mistakes that one can make. Below are a few common mistakes:
• Entering trades on the basis of emotions or tips. Tips are generally given by brokers to their clients and these tips never work in the favour of the client. Hence, trades should only be taken on the basis of proper technical studies.
• By not exiting the trade when you have been stopped out. Many traders hold onto trades when they are making a loss in the hope that it will come back in their favour.
• When a trader risks too much amount of money on one particular trade. A trader cannot play blind in the markets, proper risk & money management techniques should be applied to each trade.
• Exiting early from a trade due to fear of loss.
• Not following your daily routine in the markets or doing nothing due to an emotional reaction.
• Not taking responsibility of your own mistake & blaming someone else for it.
• Taking multiple trades in the same account, hence losing track of your trades.
• Not being updated in the market which leads to not having an updated strategy. The market conditions keep changing & a trader needs to keep a track of it & trade the markets accordingly. Not doing so will end up giving him poor results for his trades.
• Not having a proper Risk Reward ratio.
• The constant need to be right in a loss making trade.
• Not having an exit strategy in mind.
• Not maintaining a document of your trades.
The stock market is a confusing place when one does not know what they are doing. Once a trader has a set plan and is disciplined towards it then nothing can stop him from making money from the markets. There is no chaos for an intelligent, focused & disciplined trader.