Your 10 Worst Enemies! [As a Trader]

Risk management, a successful trading system, determination, self-control, and ambition are the best friends of a trader. 

Here are the biggest threats to a trader:

  1. Stubbornness: Failure to cut losses and a continued pattern of staying in trades past their invalidation point.
  2. Trading too big: Once you take on large positions, it’s not a question of whether major trading goes wrong, but when. If your risk size is too high, a losing streak will easily empty your balance and create a large drawdown that is difficult to climb out of.
  3. Arrogance: Believing that, for no apparent reason, you are smarter than most market participants. Expertise has to come before confidence.
  4. Euphoria: The riskiest phase in your trading journey is the time you feel like an unstoppable god. Remain grounded in your trading plan. Some major losses are attributed to over-confidence and neglect of proper position sizing.
  5. Opinion: Individual perspectives are irrelevant unless you have a fully functional flux capacitor or magic wand. The core factor that contributes to a profitable trader is their reaction to the price action.
  6. Anger: An upset trader is a poor trader. Anger skews the expectation of a trader and leads to greater activity while you are poorly operating. Do not act forcefully, remain emotionally cool and trade the plan.
  7. Adding to a failing trade: Doubling down on losing traders makes you want to hold it longer, hoping desperately for a turnaround. Trading aggressively against the trend is generally not the best idea, and adding to a losing trade is bound to create losses.
  8. Bias: It’s risky to get caught in bull-mode or bear-mode and can end in drawdowns if you keep playing on a team that loses day by day. Continue your flexible trading and go for the ride. Staying on the losing end of a strong trend is costly.
  9. Chasing a trade: Unless you miss a great entry spot and then price moves away, it’s best to wait out the trade. It’s easier to have a strategy and be prepared for the next setup. Most notably, Risk /Reward proportions will be skewed if your entry is too far off.
  10. Themself: the willingness of a trader to self-control can decide their long-term success. A successful trading system must be adopted in real-time market conditions after backtesting with consistency and correct position sizing. On your path to trading prosperity, the biggest enemy you’ll ever face is yourself.

Thanks for reading! Consider the following:

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