Not honoring your original stops. Big losses make winning systems losing ones.
- Quit trading it during draw downs. All systems have losing streaks, the key is to manage risk and stick to it until the system gets make to a winning streak.
- Lack of discipline, drifting from taking defined entries and exit signals to opinions is hazardous.
- Trading too big, no system can survive huge positions sizing that makes the first string of losses the last.
- Style drift is deadly, slowly changing your trading plan during active trades is not good. Research comes after hours and before changes are made.
- If you can’t mentally and emotionally deal with the equity curve of your trading style then you can’t trade it long term.
- You have to believe that your method will work, confidence comes from research and homework.
- Don’t trade someone else’s system, build your own. Custom to fit who you are by using the principles that work.
- Trading bigger during losing streaks ruins the potential of winning, don’t try to get back the blood the market took from you instead try to stop the bleeding by trading smaller and smaller until a new winning streak emerges.
Straying from the trading plan and making one big, bold, can’t miss trade and blow up all your previous profits. Don’t let greed make you do something stupid, stick to the plan.
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