The reasons or mistakes behind a trader make losses. I suggest you these reasons should not be repeated. If you might have also come to cross from this reason and got losses, you can type in comment number of specific reason what you have faced.
In case, you also have another reason except in this post, please or kindly specify it in comment section. We will discuss it for a solution.
1). Stop following the right/perfect "trade-setup strategy" even if you are earning from it.
For instance, you're going good in "breakout setup" but not following consistently, change suddenly/started to follow another pattern the setup.
2). Not enough Technical Knowledge.
New traders just learn from YouTube or another resource about basic charting reading & indicators, such as MACD, chart pattern, trendline, etc. directly jump in practical trading with using full margin and later convert to loss. They believe trading is very easy but it's theoretically. In the practical, you need experience & practice a lot to earn.
3). Believing blindly on Other's Tips.
A lot of traders pay high prices for tips/research/analysis and follow them blindly without applying margin management rules. As a result, they wipe out. I am not saying to ignore/avoid other research or analysis but you should apply margin management rules and also do paper trading on their research.
4). Try to cover loss, Expecting huge profit.
When traders take a loss, they think to recover the loss by taking entry huge quantities to recover from little pips/points and fall into a huge loss. *After taking a position with the perfect trade-setup, some traders expect more profit than the per-defined target. Later, they convert into loss because of changing setup.
5). You take risks that you can't afford to lose.
Taking Unlimited Risk means, neither protective stop nor mental stop. Some people keep a 1:1 stop-loss and target ratio. Don't do this: "Holding losers trades while selling winners trades".
6). Lack of Emotion Control.
Not following your own per-defined setup, for example, changing stop-loss or not exiting and expecting to recover, sometimes not booking profit and expecting more profit and finally convert into a loss. In more clear words, change your set-up frequently while real-time trading.
Don't believe in Exit or Marry with Beliefs/Hopes(Hope is not a strategy). Believe in recover loss without any specific reasons and finally had to take a huge loss.
I have seen in many new traders, they let Loose Grow and take a small profit.
Avoid the words ‘hope”, “wish” or ‘feel’ when talking about a trade-setup.
trading is not a precise way to earn through stock market unless having a full practical experience
Shaily_
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(1)Desperation for entry (2)Overconfidence (3)Generally have Sl in mind.not on terminal. (4)I used to get freeze when my sl comes. (5)Not acceptance of small sl. (6)Even if I know market is going in opposite direction, I don't reverse my positions.
spacewalkermohammedaqueb
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@Shaily_, (1)desperation for entry = adjust your position sizing
rishabh_z
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Hey! Thanks for the post. I would like to share my problems I've faced during *Option Trading* (I trade on NIFTY index):
1. Missing/Imbalanced Psychology due to which my entry/exit are not correct. Even in the winning trades, in the greed for more profit I lose the current profits and if I had to close the Tarde with a loss then I re-enter and start Revenge Trading which further increases losses(most of the time).
2. If my entry is proved wrong by the next 5 min candle which may even hit my SL I still not exit in the hope of that I might recover.
3. In such situations I sometime become blind to my own setup and take random decisions.
Even though I've observed my above mistakes it is still very difficult to correct them while on live trades. And it's not like I always make a loss, I've made profitable trades as well but I've not been able to achieve consistency and discipline.
Would be great to know if anyone here can relate to my problems while doing Option Trading and also recommend a solution.
Thanks.
Trade-Technique
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Thank you @rishabh_z , for posting your question/problem related to post content.
Prior to decoding your trading issues, I would like to know about your experience as a trader. You've to learn why & how to trade in the options on the account of its very difficult compared to all other trading instruments. I suggest trading in the options segment whenever big events, high impact news (such as election, budget, etc), highly volatile market, etc. I use options trading when the upcoming move is very volatile and ATR(Average True Value) is much and more.
1. faithfully, believe in your trade setup, and strictly follow it. Just, avoid news channels and all other sources after creating a position on the perfect setup. Don't listen to anyone because your setup must have everything involved, risk & reward ratio as per your afforded loss, technical analysis, risk management, etc. You have to practice for this. One more thing is important, don't look or focus on total daily loss and profit but, check weekly, 15 days, or 30 days balance sheep of your P/L.
2. Personally, I suggest to avoid look 5 min chart but use multi-time frame. For instance, I am using weekly, 2days, 8hrs(not always), 4hrs, 1hrs and 15min time-frame. Look up at-least 4 T.F. before taking real-time entry or creating setup-up.
3. Never trade without any multiple reasons which is favor of in traded direction. I don't prefer to trade when other getting profit or I am free or i am feeling boring so take a small profit. Don't do this. This is not a video game.
I will also help you. Thanks.
rishabh_z
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Thanks for the response bro! Would be great if you would wanna connect as well and help each other out in options trading. My contact: rishabh.gupta77@outlook.com
Thanks.
angu012d
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@Kinnari_Prajapati thanks 😊. I have the same issue and more and less solution is same whatever you suggested
ys7905726
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@rishabh_z, do only single trade and accept that profit or loss
Thank you for your valuable contribution to the Tradingview community and keep up the good work!