[If you’re a newbie trader, avoid this habit of averaging into losses]

Imagine:

You bought 1 lot of EUR/USD at 1.3000.

Shortly, the price dropped 50 pips and you’re down $500.

Now you’re thinking to yourself…

“I knew it, the market is out to get me again.”

“But wait… if I buy another 1 lot of EUR/USD, then I can quickly get out at breakeven if the price moves up 25 pips.”

“I’m a genius!”

So…

You buy another lot of EUR/USD at 1.2950.

Next thing you know, EUR/USD tanked 100 pips—which puts you at a loss of $3,500.

In other words…

If you had cut your loss from the start, it would have only been a loss of $500.

But because you gave in to your emotions and averaged into your losses, it grew into a $3,500 loss.

So the lesson is this:

If the market proves you wrong, get out of the trade.

Don’t average into your losers because it could snowball into something near impossible to recover from.

Triple Bottom Chart Pattern (The Essential Guide)

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Seeing your account go nowhere can be difficult

But rem, you need time for your edge to play out

You won't be a profitable trader after taking a course

You don't get a baby in 1 month by getting 9 women pregnant

Rome isn't built in a day—and it's the same for your account

Limit Order vs Stop Order: Which one Should You Use And Why?

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[It sucks, but just let the price hit your stop loss]

Imagine:

You buy 1 standard lot of GBP/USD at 1.4300 and have a stop loss at 1.4250.

This means if the price drops to 1.4250, you will exit the trade for a loss of $500 (or 50 pips).

Now, this is fine if you allow your stop loss to do its job.

However, you might be thinking…

“I know the market is about to rebound.”

“I’ll look like an idiot if I were to sell right now and only to watch the market reverse higher.”

“Let me hold on to the trade for a while longer and sell at the next rally.”

And what happens next?

The market collapsed another 500 pips.

Eventually, the pain is too much to bear and you forced yourself to exit your position.

And because of your hesitation, a $500 loss amplified into $5,500.

So, the bottom line is this…

Honour your stop loss.

It’s there to protect your trading account even though it’ll make you look like a fool once in a while.

Money Flow Index Indicator (The Essential Guide)

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How to Draw Fibonacci Retracement: A Step-by-Step Guide for Traders

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Never trust anything. Always verify everything.

Especially in trading.

How To Set Take Profit Orders (The Essential Guide)

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The Parabolic Stock Trading Strategy Guide

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In business:

You need capital.

You have expenses to cover.

You don't expect to succeed from day one.

You need some time before you make a profit.

Trading is a business—so treat it as one.

The Complete Guide To Trading Sideways Markets

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[Make it painful to not follow your trading plan]

Here’s the thing:

Just because you have a trading plan doesn’t mean you won’t have itchy fingers.

Because you might lack the discipline to follow your trading plan even though it’s good for you.

(Kind of like how you don’t eat enough vegetables even though you know it’s good for you.)

The solution?

Be accountable to someone. It could be your spouse, a friend, or someone you trust.

Let them know whenever you deviate from your trading plan, you’ll be penalized.

The penalty could be something like:

—$50 donation to your favourite charity
—Wash the toilets for a week
—Do 100 push-ups

You want to make sure the pain of not following your trading plan is greater than following it.

This way, the mind gravitates toward the least amount of pain which is to follow your trading plan.

This means your actions become consistent and you get consistent results.

The Ultimate Divergence Cheatsheet

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Trading is a get rich slow scheme.

The Definitive Guide To Heiken Ashi Candles

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[Don’t trade based on other people’s opinions]

Today…

There’s a ton of information on Twitter, Facebook, trading forums, etc.

The problem is…

It doesn’t make you a better trade, far from it.

Here’s an example. Imagine…

Someone posts a chart on Tesla and explains why he is bullish on it.

Next, there are 100 thumbs up and a flood of comments agreeing with the analysis.

So you quickly buy the stock of Tesla hoping to make a quick profit out of it.

Now here comes the critical part…

What if the price of Tesla drops 30%?

Do you sell, hold, or buy even more?

You don’t know because you’re trading based on the opinion of someone else.

You might be wondering:

“Well, I’ll just ask the original poster for an update on Tesla.”

Then one of these will likely happen…

—He sold his position for a small profit and you didn’t know about it
—He sold his position for a small loss but you’re still holding the stock
—He doesn’t reply to you

Either way, you’re on the losing end.

Do you see what I mean?

So, never trade based on the opinions of others.

They won’t tell you how long they plan to hold the trade, when to cut loss, or when to take profit.

Instead, you must have your own trading system that tells you when exactly to buy or sell. This way, you’ll never be at the mercy of others again.

How To Catch A Falling Knife (The Essential Guide)

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Discover 19 Powerful Lessons from the Legend, Jesse Livermore

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How to reduce your fear of trading:

–Don’t go all in
–Manage your risks
–Reduce your position size
–Trade with a strategy that offers an edge
–Not more than 50% of your wealth in the markets