How to blow your account?

Hello traders,

We will talk about the collection of behaviors, routines, and attitudes that will ruin your finances in this post.

Step by step manual

• Traders are based on subjective judgements.
• Placement of stop losses is for losers.
• Set improbable targets.
• No time for keeping a journal.
• Trading plans are for beginners.
• Blindly adopting another’s perspective.
• Who requires economic data?
• Indicators are the miracle drug.
• Not making educational investments.
• Back testing is useless.
• Paper trading is not rational.

1. Trades are based on subjective judgments.

Each trade decision must have a justification. Professional traders enter trades for very specific and objective reasons, but unsuccessful traders follow their emotions and instincts.

2. Placement of stop losses is for losers.

Many traders frequently forget to set a stop loss. Keep in mind that even one trade without it might wipe out your whole account.

3. Set improbable targets.

The equity size is not inversely correlated with possible gains, according to a prevalent assumption about trading. Such thinking leads to several wrong conclusions.

One who expects to buy a Lambo while trading with a $100 account would inevitably blow the account.

4. No time for keeping a journal.

Why would you even bother with trade journals? Time is simply being wasted. Keep in mind that one of the finest learning tools is a trading log. By continually evaluating your past choices, you might find strategy faults and rectify them to increase future earnings.

5. Trading plans are for beginners.

Many traders will trade without a plan. Keep in mind that your trading plan serves as a route map. Being a consistently successful trader is impossible without trading plans.

6. Blindly adopting another's perspective.

As you learn to trade, it is important to understand why professionals in the field make the decisions they do. You are not learning by simply following them; in addition, you are developing dependency. By losing, you transfer the burden of accountability from yourself to others.

You will fail if you use this method. Before you copy any trader, develop the responsibility to make your own trading judgments and carry out your own research.

7. Who requires economic data?

The market is driven by fundamentals, as we have frequently emphasized. Without a doubt, the market will trick you if you ignore trends, the state of the world, and news analysis.

8. Indicators are the miracle drug.

Many traders spend thousands of dollars trying to find the "magic indicator" - the tool that would generate enormous profits. The fact is that indicators are only a tool in a tool in your toolkit. Its purpose is to give your analysis a few modest hints. If you overestimate the value of indicators, you will probably lose money.

9. Not making educational investments.

Many traders prefer to spend their money on fancy tools, signal services, robots, and indicators rather than on education. But the truth is that only knowledge allows for freedom, and only skills can enable independence.

10. Back testing is useless.

Many traders purposefully omit the back testing phase when experimenting with new techniques. Keep in mind that backtesting is the most effective technique to confirm a strategy's effectiveness and allows you to do so while simultaneously saving time and money.

11. Paper trading is not rational.

There is no logic in paper trading. For whatever reason, the vast majority of traders forego demo trading in favor of creating a real account right away.

Demo trading is the finest, risk-free tool for understanding how the market functions.