Fatal Flaws of Trading

By | October 27, 2016 3:52 pm

In Continuation with Previous Article

Lack of Patience

Trading is game of waiting, its Like Lion going for His KILL.
If Trader has Lack of Patience big profit will not come and if Big profits do not come long term sustainability is not possible. Its a well known thing  markets trend only 20% of the time,  the other 80% of the time the markets are not trending in one clear direction.

That may explain why I believe that for any given time frame, there are only two or three really good trading opportunities. For example, if you’re a long-term trader, there are typically only two or three compelling tradable moves in a market during any given year. Similarly, if you are a short-term trader, there are only two or three high-quality trade setups in a given week.

Most of traders I have interacted with Try to trade more and more,  it’s easy to feel like you’re missing the party if you don’t trade a lot. As a result, you start taking trade setups of lesser and lesser quality and begin to over-trade. Traders should believe in Quality trading, Trade Less Trade Better.

How do you overcome this lack of patience? The advice I have found to be most valuable is to remind yourself that every week, there is always another opportunity waiting for me provided I preserve my trading capital.  In other words, don’t worry about missing an opportunity today, because there will be another one tomorrow, next week and next month.Market will reaming forever Bigger question is can you sustain in market for so long ?


Lack of Money Management

Most of Professional traders  tend to limit their risk on any given position to 1% – 3% of their trading account. If we apply this rule to retail traders trading on capital between 50K-100K, then for every 50-100 K we have in our trading account, we can risk only 500-1000 on any given trade. 500-1000 Stop Loss is Too small if You trade in Futures. So Most of traders try to use leverage provided by their brokers and one bad trades just bust their trading account.

Simply put, I believe that many traders begin to trade either under-funded or without sufficient capital in their trading account to trade the markets they choose to trade.

If you have a small trading account, then trade small. You can accomplish this by trading in cash market, in 100-200 quantity where leverage will be almost NIL. Bottom line, on your way to becoming a consistently successful trader, you must realize that one key is longevity. If your risk on any given position is relatively small, then you can weather the series if bad trades. Conversely, if you risk 25% of your portfolio on each trade, after four consecutive losers, you’re out all together

One thought on “Fatal Flaws of Trading

  1. Shyam

    Accumulation of shares can be considered sort of trading (investment trading) wherein you strive to keep average cost low and average price high might be with index of 200 to 300 stocks simultaneously.


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