From Alan Farley comes another good list of errors to be aware of:
1. Fearing you’ll miss the big move.
That’s the biggest error traders make on a regular basis. It goes like this: You want in badly, but you’re too scared to act. Finally, the fear of missing out overcomes your better judgment, and you jump in. But the move ends abruptly, and you’re left holding the bag.
2. Trading too big
Every position has a right size. Never trade over that amount, regardless of the account size. And forget about using margin until you know what to do with it. There’s absolutely no rush to make your first million.
3. Taking a bad trade ’cause of a stock guru or analyst
It’s your money at stake — don’ let someone else tell you what to do with it. Do your homework before you enter the market and then take responsibility for your actions.
4. Getting carried away by emotions
The market is indeed a scary place, but you’ll lose a fortune if you let your feelings control how you trade.
I have a nasty habit of pulling good trades off the table just minutes before they go vertical. Somehow, my subconscious mind sees the profit I’m about to make, and decides I’m just not worthy.
6. Trading Software is no substitute for good trading skills.
All that heavy-duty code and processing power Pretty colors flashing on a state-of-the-art screen won’t make you a better trader, but they can make you a poorer one.
7. Trading like Gamblers
The bottom line: You will get hurt whenever you trade like it’s a horse race.
Good stuff alan, thanks!<spacer>
Beware the Top Seven Trading Mistakes
By Alan Farley
RealMoney.com, 10/20/2005 12:01 PM EDT