After knowing the two previous factors that make your trading fail, let’s continue our discussion about the next three.
Check out these factors that make your trading fail:
Besides the two previous things, revenge is also a matter that make your trading fail. The spirit of revenge of a trader usually arises when they try to trade more aggressively, especially after a loss. According to My Trading Skills, revenge trading happens after a trader suffers a significant loss
Additionally, the main purpose of a trader to take revenge is when trying to restore a position that previously lost. Instead of reversing losses, this often makes traders jump into the brink of collapse.
Revenge when trading is a very dangerous thing. There are at least three main reasons for you not to do something dangerous. First, because this is not usually well planned, this can make you too hasty in making decisions that aren’t profitable. What’s more, in this case, you also tend to gamble compared to trading, especially since all transactions are based solely on emotions, and not based on a comprehensive plan and analysis.
Second, because you have been desperate to cover a loss that occurred before, revenge will force you to open a position with larger transaction size. Of course, this is not a solution because you directly have the potential for a greater risk of loss. Besides, this also contradicts the risk management that you have made before, just to cover the losses incurred before.
Finally, this is an emotional trading habit that is driven by wrong motives. It also changes your previous focus from rational trading decisions to emotionally driven trading choices. And in the end, your emotions will close positive thoughts, and discipline, which ultimately compromises your trading account.
Who is not happy when successfully making a profit in trading? I’m 100% sure all traders will be happy about this. However, did you know that when you experience something fun, then dissolve in euphoria, then actually it also has risks that can eliminate? Thus, you have to control yourself both in a loss and profit result.