7 Deadly Trading Sins
1) Risking 2% of your account (it’s ridiculous)
Risking a set percentage of your account is something that many Forex trading websites talk about, and it’s something that many Forex traders do; however, the reality is that it’s a flawed approach, and it could be keeping you stuck in a cycle of poor trading performance. Let me explain
2) Being a greedy idiot
greedGreed is one of the original “7 Deadly Sins”, and it’s no surprise that it’s a deadly sin in the trading world too, after all it’s human nature to become greedy when money or material things are involved. Most traders are no different from gamblers at the casino; they are all just chasing the ‘big win’. It’s an addictive game that gets in your blood and doesn’t get out until you ‘snap out of it’ somehow, usually from losing a significant amount of money.
3) Day-trading and scalping
In case you’ve been living in a bat-cave on some remote island for the last 4 years, you already know we don’t day-trade or scalp, in fact it’s safe to say we hate high frequency trading. One of the most common questions we get is “can you use price action to day-trade and scalp the markets?” The answer is yes, you certainly can, but you should expect to blow out your account if you do. I’m serious about that, the only people who have any business even attempting day-trading or scalping are people who are ALREADY trading for a living and who have thus fully mastered swing trading on the higher time frame charts
4) Combining trading methods
We often get people emailing saying that they are combining a strategy they learned in my course with a “MACD” system or some other fill-in-the-blank indicator system that is really just clouding up their charts. The bottom line is that we do not ‘blend’ trading methods, it’s simply a case of you need to ‘let go’ of your glorious 4 hour MACD cross over system that you found on Forex Factory and move on to something logical and real. Most people who stick with trading long enough eventually figure out that they aren’t helping themselves by plastering indicators on their charts or learning some ‘hot’ new trading system that’s getting a lot of hype on some website. These are gimmicks folks, they sound really good, but in reality they are just wasting your time and masking over the reality of what it takes to trade successfully, and that is why combining complicated and messy trading methods with price action is the a deadly trading sin
5) Cockiness and arrogance
Our next deadly trading sin is arrogance or cockiness, however you want to put it, many traders fall prey to this sin and it ends up costing them dearly. Time and time again we get people emailing us who are clearly failed traders making all the most common emotional trading mistakes, yet they seem unaware that they are even doing anything wrong and are puzzled as to why they are losing money. In other words, they are blinded by their own arrogance and they are playing some game of pretending they are a pro trader even though their account balance proves otherwise