Some of the Most Common Mistakes to Avoid when Trading

The world is home of all kinds of mistakes that a human can do.  That’s because everybody makes mistakes.  The same is true in the world of bitcoin.  Each and every investor commits mistakes.  And no one can really be 100 percent sure that he or she has not made or isn’t making a mistake.

Here are some of the most common mistakes that you should avoid when trading.

Publicizing your trading strategy too much

The right word for this is boasting.  Sometimes, when an investor feels really good about his or her trading strategy, there’s this urge to boast about it.

Almost every trader is guilty of this.  It just works so fine that we think we can brag about it to our friends and other traders—until it becomes useless.

Keep in mind that a good trading strategy remains good as long as not so many trades are using it at the same time.  If you publicize your trading strategy too much, plenty other traders will try it and you know what comes after that.

Behaving like an investor but with a trader’s capital

Perhaps the greatest thing you have to keep in mind is to think like a trader.  And a trader always trades with a finite amount of capital.

Some traders behave as if they have the money to spare is venturing into uncharted trading territories.  In many cases like this, a investors tend to convert a trading position into a delivery position just because he or she can arrange the required funds.

You have to remember that trading and investing are two distinct kinds of styles, especially with amount of money involved.

Creating convoluted trades

You may not see this often within the Bitcoin Price.  However, traders who trade in futures and options tend to create super complex positions.

Sometime they sell calls and puts of multiple strikes and also buy calls and puts of multiple strikes.  This style can be chaotic.  In addition, it has two problems: you wouldn’t know if you are really going long or going short.  Second, the multilayered position needs to be closed too, with liquidity and cost as major issues.

Ignoring trading costs

This is arguably the largest mistake that traders commit very frequently.  If you’re a trader, you are looking to whip your capital aggressively.  That in itself means you need to keep your trading costs low.

And when you are trading, it’s not just the transaction but also the statutory costs that can rack up and eat away your money.

Attempting to outsmart the market

Traders do not typically try to outsmart the market.  Most of the time, people who do this are investors with long investing time horizon, along with a big capital.

When the market moves in a certain manner, it’s in fact trying to throw you a clue of the underlying market trend.  Your main goal is to read this trend and trade according to it.  If you try to outsmart the market, you will always find yourself on the losing side.




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