A trader’s best friends are risk management, trading method, perseverance, self control, and passion. Here are a trader’s worst enemies:
Stubbornness: Not cutting losses and sticking with a trading method that doesn’t work.
Arrogance: Believing that you are smarter than the majority of market participants before being proven.
Opinion: Opinions about the future are useless unless you posses a fully functional crystal ball or time machine. The thing that leads to being a successful trader, is ttrading the price action in the present moment.
Bias: Getting stuck in bull-mode or bear-mode is dangerous and can lead to losses if you keep playing on a team that is losing day after day. Stay flexible in your trading and go with the flow.
Euphoria: The moment you feel like an invincible genius is the most dangerous moment in your trading career. Stick with your trading plan and stay grounded.
Anger: An angry trader is almost always a bad trader. Anger skews a trader’s perspective and leads to trading bigger when you are trading badly. Don’t go there.
Adding to a losing trade: Making your losing trades bigger makes you want to hold them longer, desperately hoping for a rebound. Trading aggressively against the trend usually does not work out in the end.
Chasing a trade: If you miss a great entry point and then it runs away from you, it is best to avoid the chase. It is better to have a plan for the next great setup, and be patient.
Trading too big: If you take on large position sizes, it is not a matter of if the big trade goes bad, but when. When your position size is too big, a losing streak in an ever-changing market can quickly drain your account.
Themselves: A trader’s ability to control themselves will determine their long term success. After research and testing, a trading plan should be implemented it in real-time market environments. The biggest enemy you will ever face on your journey to trading success is yourself.
