Trading Just For the Thrill of the Action:
Instead of focusing on high-potential setups (stocks with good charts, upcoming catalysts, etc.), a lot of amateur traders enter positions just for the thrill of the action. In essence, they’re treating trading like gambling – they’re not putting the odds in their favor, but blindly throwing their money around in hopes that they’ll strike gold. Having that mindset is one of the biggest mistakes new traders make.
In addition to that, they give no thought to proper allocation. Instead of protecting their portfolio in instances where they might be wrong, they allocate their entire portfolio to one single position – that’s an extremely risky maneuver. Trying to get rich off one trade is the wrong way to go; consistency will keep you in the game for the long-haul. With this in mind, it all circles back to education and discipline: only taking trades when risk/reward is in your favor, approaching every potential trade with a plan, cutting losses early, and studying before risking your hard-earned money. Relying on “hope” is not a strategy. Trading successfully is a developed skill.
Related Page: Swing Trading Success Stories – Jason Bond & Kyle Dennis