Habits are things that you do subconsciously and with time you have made it a routine for yourself.
Traders to have some habits, it could be both good and bad, but if the right habits aren’t developed then it’s going to be a rough ride ahead.
So here are 3 habits that you need to get rid of right away and these are ones that every trader develops, even the best ones, but they need to realize that it’s doing more harm than good and must get rid of it ASAP.
1. YOLOing every trade
YOLO is a social media slang that stands for You Only Live Once. It’s what people say when they do something risky or a once in a lifetime thing. Basically, it’s just for the thrills.
I’ve come across traders that have started YOLOing in trading too. What this means is that they risk their entire capital in a single trade and they justify it by saying YOLO.
Just look at the conversation threads on Twitter, Reddit, and even on Instagram. You’ll see so many traders that go all in the trade and they don’t care if they lose the entire account on a single trade.
No matter how cool it seems or how thrilling it feels, this is not how trading works.
No trader should ever YOLO in a single trade by going all in. You’re supposed to manage risk properly, risk only 1% to 3% on any given trade.
Make this your motto - Trade to live another day. Trade with only that much risk that you have enough capital to keep trading for a long time even if you keep losing.
Say that you have a $1,000 account. If you YOLO, you might risk the entire account on a single trade. If you win, you win decent, but if you lose, then you lose everything.
But only a smart trader will risk just $10 to $30 on a single trade. Even if the trade is a loser, you’d lose just that small amount and not the entire capital.
This is the most important trading habit you need to develop right from the beginning or else you might have a hard time trading.
2. Getting married to trades
You ever had those trades that you just could never cut off or get out of even if it was going against you? Well, I did have those and trust me when I say this, it’s literally the worst thing a trader can do.
It is just like getting married, it’s so hard to leave even if you wanted to.
With all the experience I have in trading, unfortunately, I’ve seen lots of traders have this bad habit.
Either they can’t cut their losses because they keep hoping that the price will come back in their favor or they just can’t accept that they were wrong.
I mean it’s just one losing trade, get over it, move on, and go win another trade and pocket the pips. I know it’s easier said than done, but it needs to be done either way.
You know what, instead of marrying the trade, you should marry your system and the process.
The way that you stay loyal to a single trade, stay loyal to your set up, strategy, system, or whatever it is, and you’ll see the difference it makes.
As they say, marry the right person and you’ll have a good life, in trading too it’s the same, marry the right thing and you’ll have a good trading journey.
3. Over doing it
Are you glued to the screen all the time and are constantly looking at the charts and trying to look for trading opportunities? Yes? Then I’m sorry to tell you that you might be doing it wrong.
When I say over doing it I mean over trading and each and every trader has been guilty of this at some point in their trading journey.
Over trading is just forcing trades even when it wasn’t there in the first place. I mean it’s literally over doing it.
Over trading could be because of two things, either you’re desperate for profits, or you’re revenge trading.
You need to know that opportunities will be plenty, but only a few will be worth it and you just have to grab those good ones.
If you force it then you’re just going to end up poor trades and it will mess everything up for you.
So here it is, these are the 3 habits you need to get rid of right away if you want to survive as a trader.
Apply this for yourself and I can tell you that you’ll see the difference for yourself.
Share this blog post with others and let them also become better traders and develop the right habits.
Feel free to reach out to me through the comments section for absolutely anything, I’ll get back to it at the earliest.