There are a lot of things that can be potentially holding you back from being successful, these can be both physical or mental things, there are always ways to overcome them, some easier than others, but there is always a way to overcome them. When you look at your trading career so far, you can probably think of a few points where things went wrong, or where you made a mistake, these all add up and can prevent success in the long run.
So we are going to be looking at some of the things that can cause trading to be a little harder than it should be, or things that you are doing that are making it harder than it has to be.
Not Enough Money
Starting with the most obvious one, if you are trying to trade with a balance of $100, there is next to no chance that you will be able to be successful, the more trading capital that you have, the more potential that you have to be successful, this is often through the ability to use much better and more realistic risk management tactics with your trading. When you have a small balance, even small movements in the markets can cause your account to blow and each trade will be risking quite a large proportion of your account balance. So having larger trading capital is vital to being a successful trader. Having said that, there have been successful traders starting with small amounts, but it is far harder and far less likely that you will succeed.
Live Trading too Early
When we start trading, we just want to get right into it to try and make some money, unfortunately, trading takes a bit longer than that, in fact, it should be taking you a few months before you jump into a live account at all. A mistake that a lot of new traders make is to try a live account straight away or after a week of using a demo account, this leads to some pretty quick losses which can then put someone off trading for quite a while, this is a reason why so many quit at the start of their trading careers. It is important that you only start on a live account when you are ready, when your plan is complete and you have tested it for a while, do not just jump straight into a live account, it will only end in losses.
Not Using a Demo Account
Similarly to the point above, you need to be using a demo account, and you need to be using it for quite a while before you even think about making any money. The demo account is there for you to test out your strategies and to ensure that you have got them working properly before actually risking any of your actual capital. It is vital that you use these accounts properly and use them to ensure that you are ready for live trading.
You Haven’t Created a Trading Plan
When you start off trading, one of the first things that you will be told is that you need to create a trading plan and a strategy. This strategy is full of information that is about the way that you will be trading and the strategy that you will be using. Without this trading plan, there is nothing keeping you in line and giving you certain rules to follow which are what you need to keep in order to ensure that your trades are good trades. Trading without a plan is called a bad trade, regardless of profit or loss, as a bad trade is more about luck rather than analysis. Ensure that you have a plan that has your trading strategy, risk management, and anything else that is involved in your trading.
Bad Risk Management
Risk management is one of the most vital parts of trading, it is what allows you to survive a number of losses in a row if you are trading without one, then even a single trade could potentially cause your account to blow. The risk management plan will include things such as the amount of your balance that you are able to risk with each trade, it also details how far your stop losses and profit levels should be. Without one of these, you are simply trading on borrowed time. Ensure that you put a lot of work and time into getting your risk management plan up to scratch and into a position where it can comfortably keep your account alive after a number of consecutive losses.
Letting Emotions Get the Better of You
There are a lot of emotions that come with trading, they can be relatively little things like being annoyed at a loss or a missed trading opportunity, but there are also some emotions that can cause you to make silly mistakes. Things like greed, overconfidence or simply wanting to win back lost money can cause a lot of issues. It is vital that you are able to control them, they often lead to making trades that either does not follow the trading plan that you are using, or they throw risk management out of the window, placing larger trades or more trades than you should be placing. If you allow these emotions to continue, they will ultimately cause you to risk too much candy can very easily make you blow your account. Keep emotions in check, if you feel like one is getting a bit too strong, then step away for a bit, take a break, clear your mind, and then come back.
Trading Too Much / Not Taking Breaks
Trading can take a long time, in fact, it can take up pretty much all of your time. There is an almost unlimited amount of information available and different ways to trade, so it is expected that you do not learn it all, but learning takes time, people seem to trade for hours on end, this can work for some, but for the majority, this will only cause stress. You need to be able to take regular breaks away from trading, do some sport, cooking, anything, as long as it clears your mind from the stresses and frustrations of trading. This is a vital part of keeping your mind fresh and healthy, your body will thank you for it at a later date.
Focus, Do Not Diversify too Much
We mentioned that there are incredible amounts of information on trading so you will not be able to learn it all, you need to be able to focus on the parts that are relevant for you. If your strategy is about a certain price movement, learn that first, do not look at other things, as soon as you do it will begin to confuse you and you may even start to get things mixed up that can lead to eros in your trading. Ensure that you focus on what you need to learn first, do not try to do too much at once or it will all be far too confusing and stressful.
So those are a few of the things that people often do or scenarios that can potentially prevent you from trading successfully, some can even throw you off track instantly. Ensure that you take things slowly, ensure that you have everything in the palace and your trading experience will be a lot more enjoyable, and a lot more successful.