Trading mistakes I will never repeat

1. Trading without defining the risk-to-reward ratio (Risk-to-Reward Ratio - R:R)

* Mistake: Entering a trade just because it looks good, or the setup seems excellent, but without prior calculation of stop-loss and take-profit points that give you at least $1 profit for every $1 loss (like a 1:1 or 2:1 ratio).

* Lesson: Even a good strategy will eventually fail with poor risk management. Always know the maximum you can lose before considering a win.

2. Removing or widening the stop-loss order ("defending" a bad trade)

* Mistake: Moving or widening the stop-loss order when prices approach it, hoping that it will "bounce back now". This turns a manageable small loss into a catastrophic loss.

* Lesson: Stop-loss is an integral part of your plan. Respect your stop-loss like professionals do. When the market reaches the specified exit point, the trade is over.

3. Using excessive leverage or increasing trade size too quickly

* Mistake: Increasing trade size quickly after a win, thinking you've "mastered it" or trying to get rich quickly. This is immediately followed by a large loss that wipes out weeks of profits.

* Lesson: Consistency is built on small, manageable risks. Gradually and slowly increase size, and always risk a small and fixed percentage (like 1-2%) of your total capital on each trade.

4. Holding a winning trade until it turns into a loss (sheer greed)

* Mistake: Refusing to take profits at the target or even partially because greed convinces you that the price "will go up a little more", then watching it reverse into a break-even trade or, worse, a loss.

* Lesson: When the market gives you money, take it. You've earned it. A partial profit-taking strategy is a winning strategy for long-term peace of mind.

5. Revenge trading or trading out of boredom

* Mistake: Entering emotional trades after an immediate loss to "recover" the money, or trading just because you want to be active even when market conditions are not ideal.

* Lesson: Trading is a waiting game. If the setup is not there, do nothing. Preserving your mental capital is just as important as preserving your financial capital.

6. Searching for the "lost treasure" (frequently changing strategies)

* Mistake: Abandoning a proven and correct strategy after a series of small losses and jumping to a new indicator or system, believing it will be the "lost treasure" (Holy Grail) of trading.

* Lesson: Every strategy goes through fluctuations. Stick to your plan and master one method. The problem is usually in execution and discipline, not in the strategy.

7. Ignoring the trading journal (failure to learn)

* Mistake: Tracking profits and losses (P&L) only and not recording your reasons for entering and exiting trades, your mental state, and key lessons learned. This ensures you will continue to repeat the same mistakes.

* Lesson: The journal is your personal coach. It reveals patterns in your behavior. You can't fix what you don't measure.