PostHeaderIcon Bad Trading Habits

Worried TraderSuccessful traders always come to the trading floor ready. They usually come equipped with a trading plan that helps guide their every trading decision. But there are also times when some traders may veer away from the original plan and be moved into making bad trading decisions.

Effect Of Fear

One of the more common factors that may bring about bad trading habits in some people is fear. It is an all too common feeling that grips most traders whenever they come into certain periods of uncertainty. An instance when a certain stock seemingly is starting to unravel with its price going down.

Further bad news may complicate things and then sow some fear in some traders. They begin to feel worried and scared of what may happen next. It can then reach up to a certain level where they may be compelled to liquidate their own holdings suddenly that may go against the guidelines of their original trading plan. Fear tends to make many traders over react which then develops into a bad trading habit.

Greed And Trading

Greed is another trait that may be common in many traders. Many traders would want to hang on more and more on their winning positions. They sometimes try to get as much as they can for as long as they can. This can be quite profitable up to a certain point. But due to greed, some traders then fail to unload in time. When the trading plan may be stating that it’s time to let go, some traders try to hang on further to try and squeeze even more from their winning holdings as they can. This can usually lead to disaster as the risk of failing grows more and more when people go against their own trading plan.

Trading On Impulse

Impulsive trading can also be a bad habit that many traders may develop along the way. It can lead them to either unload holdings too quickly or keeping them for too long. Trading decisions based on impulse usually lead to disaster since it is being done usually without conferring with the common trading rules. Trading on impulse can also easily prevent one from following a well-thought of trading plan.


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