What are your worst ideas?
Instrumental trading is about making money by using the right information in the right order. A swing trader picks up useful information at the right time. It all becomes part of your brain’s natural order response. With this in mind, most swing traders use the “two step” strategy for trading, or make a decision after the first pass of information to make a final decision.
What are the most common mistakes and things traders can do to avoid them?
A large majority of the mistakes beginners make is simply the way they approach swing trading.
So while many beginners get sucked into the system and think ‘this is good’, that they’ll be making a lot of money, this isn’t the truth. While some traders make a good bit from swing trading, it’s not as easy to make as it sounds.
The most common mistake beginners tend to make is in being overly optimistic about trading performance. They may see their trades as being a success, but then quickly re-evaluate later and not make any money. That’s not to say your trades aren’t good but it is a mistake to overestimate, let alone the success rate.
When looking at things like trading volume or volume to market, you don’t want to overestimate, simply because it is a lot easier to see a positive trend change. However some traders see a positive trend change but are only taking a percentage loss than actually becoming a winner in the market.
Another mistake beginners tend to make when setting up their bets is that they assume they have a strategy that can be replicated by others. This is not true. If you have been working on a strategy for a while, you might not think you have something to throw away, but it’s important to remember that strategies work on the basis of information you collect from other traders. If no one else will ever think to use your strategy, it’s your mistake to think it’s a winning strategy for them.
Finally, beginners tend to try and replicate other traders’ strategies in order to mimic some of the successes of them and try and get a little more money for their investment. This only serves to make you more of a target, as trading strategy is the basis for the market. Trying to copy someone else’s strategy is a fool’s game.
So that’s it for this week. There’s plenty more I could cover but let’s wrap things up today with one more article that is really good for people who