5 Bad Habits Traders Should Give Up
The first advice from ASX Markets is that traders should examine to see whether any poor habits still exist and decisively give up them before making new trades. Below are five bad habits you should modify right now if you want to improve your trading outcomes.
Fear of loss
It is the psychology of many traders, including the seasoned ones. Loss is a regular aspect of trading, and traders should be prepared to take it. Furthermore, after experiencing with a loss, traders will be able to learn from their mistakes and be more mature in future trades.
Then why would you be terrified of what allows you to mature when it is an intrinsic aspect. Traders should be training their patience and skills of psychological control during trades for profits to win over the failed deals to which you have to face during your trading.
This is one of the most common blunders made by many traders. Financial markets are dominated by greed and fear at all times. Crowded trading refers to a group of individual investors who rely on the actions of other investors to execute trades.
Usually crowd psychology appears in two cases: First, investors are overly enthusiastic. Second, investors are scared. Either way, it increases risks to investors’ trades. Over enthusiasm will be causative of a virtual price phenomenon and over scare results in selling everything to cut loss. Crowd psychology is a significant impact factor on the rise or fall of stock prices. When a crowd buys, the stock price rises, and vice versa.
Following the crowd is a bad habit to be eliminated at once if investors wish to invest for the long term. This is regarded as an inherent disadvantage in the market, and it is easy to cause panic if investors fail to keep their minds.
Smart traders choose several best time frames and trade sessions to enhance investment outcomes. Staying 24/24 in front of the screen is unnecessary for a trader. Moreover, if monitoring the market for too long, traders would be more likely to have FOMO and overtrading as a result.
No concrete trade plan
Trading according to a concrete plan is an important part of a trader’s profit-seeking. If you have never planned before trading, now is the time for you to change that harmful behavior. Trading under a plan allows traders to keep track of trading progress and make adjustments in due time if the market moves against their expectations.
Break up your own trading principles
Every trader has his/her own trading principles. However, many traders are so influenced by market conditions or psychological factors that they violate the principles they set for themselves. Once a trading principle is broken, that mistake is likely to repeat again and again. So, if you have this bad habit, do get rid of it right away and train yourself with principled trades.
Above are bad habits that traders should abandon right away if they want to get better trading results. If you need help on trading methods or how to manage your emotions effectively, don’t hesitate to contact ASX Markets via the hotline 1900299990 or our Facebook fan page for immediate assistance.