8 Common Problems That 90 % of the Traders Face
Problem 2: Liquidating position too soon
Liquidating the position based on guts feeling rather than pre-defined exit rules, or unable to hold on to a trade for long enough resulting leaving too much money on the table.
Causes & Solutions:
This is usually caused by the fear of market will make a U-turn after you have some unrealised profit hence, you liquidate your position prematurely without following your own exit rules or wait for the market to tell you to exit.
This act will sometimes get you better profit than you were following your rules, however, if this action is done enough times it will eventually make you lesser profits due to lack of consistency.
Solution to this is to look back to your past trades or do a backtest to find what out what the best exit method is over a large number of sample size (at least 100 trades).
Whenever you have the urge to liquidate your position too early or not according to your trading plan, remind yourself that the trading plan is a method that is backed by stats and its proven to generate you maximum profit in the long run.
You have to accept the fact that no one is able to catch the top or bottom every single time. Even though everyone knows this fact, but the way they act show otherwise.
Those who try to predict where the top and where the bottom is, will feel extremely good when they predicted it correctly and at the same time they will feel frustrated when the market is moving higher after profit is being taken. Stop doing that! No one can predict the future!
3rd solution is to shift your focus into complying your trading plans instead of focusing on the profit and loss figure. The ups and down of the P&L figure definitely will cloud your judgment as a trader.
Last but not least
It is impossible to overcome all your mental obstacles just by reading books or watching videos alone. It requires hours of practices and dedication in order to get your mind reprogrammed. Without this, you will end up making the same mistake you promised yourself not to again and again.
However, with the right framework, this can be done effectively and save you from years of trials and errors, it also means money being saved from giving it to the market.
Learn how our "core of successful trading framework" that helped hundreds of traders around the globe obtaining consistency in trading in as short as 3 weeks time.