Overtrading

Mistake:
One of the most common mistakes is overtrading—buying and selling too frequently. This often happens when traders try to chase every market movement or become too emotional after a loss.

How to Avoid It:

• Set clear entry and exit strategies.
• Stick to your trading plan, and don’t make impulsive trades based on fear or greed.
• Take breaks to avoid burnout and excessive risk-taking.

Ignoring Risk Management

Mistake:
Failing to use proper risk management techniques can lead to huge losses. Not setting stop-loss orders or risking too much on a single trade can wipe out your trading account quickly.

How to Avoid It:

• Always set stop-loss orders to protect your capital.
• Use the 1% rule: never risk more than 1% of your total account balance on a single trade.
• Diversify your investments to spread risk across different assets.

Letting Emotions Control Your Trades

Mistake:
Emotional trading, driven by fear, greed, or frustration, can cloud your judgment and lead to poor decisions. When you trade based on emotions, you’re more likely to make rash, irrational moves.

How to Avoid It:

• Stick to your trading plan and trust your strategy.
• Keep emotions in check by focusing on the data, not on temporary market movements.
• Practice mindfulness or take short breaks to regain perspective.