1. Hold on to the floating losses
This method is basically easy for both novices and veterans to fall into, and even some experts will fall into it. The reason why this method is popular and has harmed many people is that it is full of hope and expectation in the process of carrying floating losses. When investors decide to cut their losses, they will not only lose money, but also feel that they have made a mistake. This sense of despair has a huge impact on trading.
Novices may be able to withstand floating losses, mainly because ignorance makes them fearless. They do not know the cruelty of this method and are often easily defeated. The veterans, on the other hand, are overconfident. With many years of trading experience, they think they are used to seeing life and death in the market. If the market blows up, they will let it blow up, but they do not take the initiative to think about why the position will blow up, and then the cycle repeats... There are also many traders who focus on fundamentals who have liquidated their positions in this way.
2. Frequent stop loss
In this method, Mr. Tianyan mentioned a long time ago that you should avoid frequent stop losses. This is because frequent stop losses can easily lead to the loss of investment funds, and this is also one of the top ways for most traders to lose money. For example, when driving on a highway with few people on the road, the chance that the brakes can be used is very small. The driver is also very comfortable, and there is no need to worry even when driving at high speed. On the contrary, when driving in cities or on crowded roads, the probability of braking is very high. If you drive at high speed and brake in this situation, accidents will often occur.
The principle of stop loss in trading is the same as that of braking when driving. If you continue to trade (driving) at a time that is not suitable for trading (on a crowded road in a city), you must continue to stop loss (brake). If you still want to If you are trading heavily (driving at high speed), it will not be too far away from a major accident.
3. Pay attention to one thing and lose another
This means that once some experienced investors feel that their level is up to standard, they will not be satisfied with trading only one variety, so they will look for several more varieties to trade. Then the product that I first bought did not rise, so I sold it and bought other products. However, as soon as I bought it, it started to fall. Then the product that I sold out began to rise again, so I kept stopping losses and chasing the rise. This cycle, the final result Even if I exhaust myself, I will almost run out of money.
4. Once back before liberation
This usually happens to experienced traders who have certain market experience and rich market knowledge. They will make large bets or heavy positions due to overconfidence and risky personality, and eventually lose all their money. Mainly because they cannot control their greed and risk appetite and always choose wrong trading opportunities.
5. Excessive addition of positions
Speculative trading is indeed a game that can exponentially amplify the greed of traders. Many times when investors make a correct transaction and watch the floating profit of their account slowly increase, they will begin to imagine how much money they would make if they had a full position. Then after calculation, I found that I could make a lot of money. In addition, I listened to what the "master" said about "adding positions according to the trend", so I started to keep adding positions, which may eventually lead to a huge loss.
6. Being smart
This means that many people like to predict in advance where the market will rise and fall. Prejudgment is actually necessary. Many experts like to say that you don’t need to predict and just follow the market. It seems that this is correct, but if you let them If you follow the market, you will most likely lose track.
But practitioners all know that prediction is also a part of trading, and the key to stop-profit and stop-loss is not to believe in predictions alone, but to be prepared to correct mistakes at any time. Those friends who like to be smart follow their predictions time and time again and strengthen their predictions. Then one bottom is penetrated and there is another bottom. One top is broken and then there is another top. The result is often a loss of money. Gone.
7. Small profits and big losses are fatal
In the market, they are often able to accurately judge and seize opportunities when the market starts. But somehow, they always suffer huge losses on trades that should make them big money. This kind of person always runs away after making a little profit. Then, instead of chasing the trend as the trend continues, he will go against the trend and end up losing money constantly.
8. Increase positions against the trend
Being trapped, they refuse to stop their losses, but instead hope to increase their positions to average costs and unwind their trap. in the stock market. This strategy may often work, but in the futures market and the foreign exchange market, the probability of success is relatively low. Most of the time, this will only make what was a small loss worse and ultimately lead to a huge loss. As for the strategy of reducing costs, many trading experts will also try to use it, but this is a skill that needs to be mastered and needs to be used with caution.
However, many inexperienced investors are full of luck and use this strategy blindly. The result is often adding insult to injury, eventually leading to catastrophic failure.
9. Believe too much in “masters”
The temptation to believe in masters is indeed inevitable. After all, "masters" are always given a mysterious aura, and there are indeed some very successful people in the investment market. However, for novice traders who enter the speculative market, a large part of them have the mentality of getting something for nothing, thinking that they can make money easily as long as they follow a certain master. Because of this mentality, the market has spawned many fake gurus to defraud them of their money, and it happens that these fake gurus are all over the market.
In fact, even for truly powerful masters, making money is not easy. They often encounter situations where they cannot make money or even lose money for a long period of time. In the eyes of experienced traders, this is normal, but for followers, it is abnormal. It's like the master is your trading system. The signals that appear for a period of time are all wrong, and then you don't believe it.
But after you don't believe it, the system gives a signal to make money, but you no longer follow it, so the system is still making money and you are already at a loss.
10. Listen to all kinds of gossip
This type of trader is basically a novice, and they mainly like to join various QQ groups or WeChat groups. After joining the group, they cannot tell what is correct, so they just listen to the news posted in the group. The final result is often losses without knowing it.
Summarize
These are ten ways that you can easily fail in trading. Whether you are a newbie or an experienced trader, you should avoid these mistakes to avoid huge losses. The trading market is full of risks, but only by remaining rational, cautious, and learning to continuously improve your trading skills can you succeed in the market.