Common Trading Mistakes You Should Avoid

In trading, as in life in general, we all know that experience is the best teacher. However, failures in stock market trading bear more weight since you stand to lose thousands of dollars (or more) with each mistake that you make. So as to help you recognize red flags and prevent you from losing money further, here is a list of some common mistakes you might want to avoid.

The Triple Threat Trader

While they may not know it, all successful traders are what we would now commonly call “triple threat traders”. Analysing the methods and plans of these traders can help the new trader develop into a success. The triple threat trader is one who successfully combines technical analysis, fundamental analysis and risk management systems.

Risk and Money Management Basics

Risk management is the theory of managing your trading risk to ensure that the trader is able to continue to trade through the inevitable bad times. There is nothing worse than having four consecutive losing trades, and then being on the right side of the market and have no trading capital left in your trading account to take advantage of it.

Why Trade Options?

Options are defined as the right to buy or sell an asset on a fixed future date at a fixed future price. They can be either an option to buy the asset (a “call option”) or an option to sell the asset (a “put option”) and can be either exchange traded (traded on a regulated exchange) or over the counter (traded directly with the counterparty). To make matters a little more complicated the trader or investor can either buy the option or sell the option.

Sell Options for Income

Options contracts are the “option to buy or sell a fixed future asset on a fixed future date”. They are generally traded either on an exchange, as an exchange traded option, or directly with the other counterparty as an over the counter security. There are many advantages in trading options, not least of which include that they are cheap to trade, have a high level of inbuilt leverage and improve the trader’s flexibility.

What Is Trading Psychology All About?

Recently, high performance professionals have been moving to psychology in order to increase their performance to the next (optimal) level. Athletes and executives were early adopters to coaching and are now embracing psychology to ensure that there is nothing “inside” that is preventing them from improving their performance. Trading psychology was brought to common acceptance by Dr Van Tharp.

Options: Understanding The Greeks

Why is it that the options market seems to have its own language that is different to all other financial markets? Financial markets have their own jargon so that traders know exactly what they are talking about when they speak with other traders. This comes from the “old days” when financial transactions were all conducted either face-to-face on an exchange floor or over the phone.

Basic Option Trades

The world of options is an exciting one. Unfortunately, many stock market traders and investors miss out on trading options because they do not understand how they work. It is understandable.

Using Average True Range to Guide Entry and Exit Points for Day and Swing Trading

The Average True Range (ATR) is not only useful in setting stop loss limits, but also is helpful in determining entry/exit points for day and swing trading. But first, let’s review what ATR is and how it is derived.

Price Action and Understanding Multiple Market Modes Using TradeStation Indicators

Advanced TradeStation indicators can provide multiple time frame (MTF) price action which is the most important fact in trading. This information will increase the effectiveness of your trading edge many fold. The interaction of the different time frames provides great information regarding which market mode you are trading.

Time Segmented Volume – The Undistorted TradeStation Indicator

Volume is difficult to analyze correctly due to inherent distortions. It’s virtually impossible to read true volume with standard volume indicators. You can overcome these volume distortions with a TradeStation indicator called Time Segmented Volume to significantly increase your trading “edge”.

CFD Terminology – Understanding Contracts for Difference

There is lots of different terminology that a trader of contracts for difference must understand if they are going to get their head around all the information out there in the contracts for different world. Whether you are looking for a broker, developing trading strategies, or self educating, understanding the terminology (just like in lots of other disciplines) is the first step.

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