Common Reasons Traders Fail:
- Risk too much money too soon
- Don’t take stop losses
- Cost average down on losing positions
- Don’t have proper money management and quit when their plan suggests they should.
The reason that traders struggle with discipline is because they’ve never had to manage themselves before. They’ve always had bosses to tell them what to do and when to do it. Even people who have owned businesses before will often struggle in the begi ing of their trading career because they are not held accountable to anyone but themselves.
In business your customers and clients let you know if you’re doing a good job. They let you know through their wallets. In trading, you are sitting alone in a room, with none one there to keep you ‘honest’ and the money sometimes doesn’t feel real because it’s just an electronic number at the bottom of the screen. The worst thing a trader can do is lie to themselves, which is a common practice.
PITFALLS TO AVOID
What you don’t want to do is risk too much money too soon before you have any idea of what you are doing. Don’t let your expectations exceed your experience level, which is a recipe for disaster, and yet too many aspiring traders fall into this trap, largely due to ego or prior success in a different field. Don’t let this happen to you!
