Top 5 Day Trading mistakes that beginner Intraday Traders do
You must know the Top 5 Day Trading mistakes that beginner Intraday Traders do If you are learning to do Intraday trade but always seems like you’re taking one step ahead but two steps back. You might be doing below 5 trading mistakes. Learning to day trade is probably one of the hardest things I’ve ever done and there’s a huge learning curve involved when it comes to day trading from building up the discipline to wake up few hours before the market even opens to analyzing news and headlines and spending hundreds of hours of screen time observing the market so this might be an unpopular opinion learning to day trade requires a bit more work. I’ve traded for a long time now and I’ve made literally every single mistake in the book because the stock market is unforgiving. The moment I think I know it all’s the moments that I will get punished. So in this blog, we’ll be talking about the top 5-day trading mistakes beginners make my personal story with all those mistakes, and how you can find and fix them in order to avoid making your small account zero.
Top 5 Day Trading mistakes that beginner Intraday Traders do
1. Not Having a trading plan
One of the foremost common trading mistake beginners make isn’t having a trading plan there is a saying that goes something like if you fail to plan then you’re aiming to fail which couldn’t be from now on true for day trading and that i was very guilty of this once I started I remember seeing some low flow to over the counter stock running from 4 Rupees to 6 Rupees within minutes I felt so excited my heart’s beating fast I’m sweating on my forehead this can be the instant on behalf of me to Bank and my brains telling myself I need to buy now alternatively and ask questions later well what’s a while I’ll get lucky make a buck or two here and there but oh it really takes is one instance why buy at the very top and right after I buy the stock completely plunges & that I lose 10% 50% of my entire account does that sound reasonably familiar I’ve done it persistently within the past most people have and that is what we call formal fear of missing out before jumping into a trade we must make a trading plan I spend about one half to 2 hours each morning before the market opens planning for all my trades that’s right you can not just stand out of bed 10 minutes before the market opens and expect it to rain money. Yes, It takes time but that’s precisely the point creating a trading plan will facilitate your avoid Fear of missing out by taking the time to jot down your thesis risk-reward, potential entries, and exits you’re already setting yourself up for a better chance of success your trading plan should a minimum of including your bias long or short all the important levels over and under your exit plans and your stop losses if you’re wrong yes that’s right a part of the trading plan should be planning for your loss especially during this volatile market because it’s only after you plant and calculated your losses that you just can keep them au fait planning for your trades is admittedly 90% of the work and once the market opens I spend the remainder of the ten of the time executing my plans and it’s even as important to follow your plans because it is to create one because if you do not follow your exit plans it can easily result in the following trading mistake.
2. Not Spending Enough Time on Paper Trading
The 2nd mistake beginner traders make isn’t spending enough time on paper trading before stepping into life okay i buy it people want to create fast money I used to be guilty of that myself rather than spending one or two months in simulator trading and learning all the mechanics I jumped right in with live trading accounts and my heart earned money and not just say I wish I hadn’t done that paper trading which is trading with simulated money and life charts allows you to be told to plan for your trades like we talked about earlier and getting aware of all the technicalities and broker interface there’s really nothing more frustrating than accidentally selling the whole position after you meant to scale out or not knowing a way to change your long orders to a brief but hey like I said before I’ve made every single mistake within the book so that’s why I’m recommending all the beginner traders starting resolute use paper trading and you gotta be disciplined and treat your paper trading accounts as if it’s real money meaning if you’re actually gonna be funding a live account with only 5,000 rupees then paper trade with 5,000 rupees. Paper Trade will allow you to urge won’t to your broker interface it’ll also allow you to induce a screen time that you simply need so as to be told price action we’ve all seen these charts templates out there with these beautiful patterns that make trading seem so simple but all told honesty memorizing patterns is owing hindsight the sole real-time indicator is price action watching hobby screen and browse Kindle steaks develop in real-time and observing how the stock reacts to varied news these are the type of experience that takes time ahead of the screen to choose up and every one the traders need to learn at their own pace.
2. Over Trading
The beginner traders make over trading because most new traders focus on trading their profits and P&L instead of trading their plans and following the charts imagine this you made a few good trades on a day so far 100 rupees here 400 rupees here and on the screen corner you see a nice 890 rupees PML you’re feeling pretty good so far but you really want to hit that nice round number of 1,000 rupees so instead of taking a break during the middle of the day you keep on trading and you start entering trades that’s perhaps not your’s plus setup and you start losing that 190 rupees went down to 700 rupees and then 400 rupees this is where you start to getting emotional and extremely frustrated because not only are you not hitting a nice number of 1000 rupees on the day you just went down even lower from the 890 rupees profit half an hour ago over trading leads to emotional trading which leads to revenge trading this is where you keep on going back to the same stocks that you just lost on in attempting to get that money back you’ve gone down from being up 890 rupees on the day to being down read 300 at the end of the day and that my friends is the story of the first year of my trading journey I knew how to make money trading in the market but I could not keep it because I let greed and emotions get in the way by over trading so here’s a few things you can do to avoid over trading first of all follow your stop-loss no excuses if you plan on getting out of that trade at 8 rupees do it yes I know it sucks to take a loss but it’s a planned loss that’s within your risk profile as part of your trading plan next walk away from your trading computer and take a break the market will always be back tomorrow and the next day.
4. Scaling up too Quickly
Next mistake is scaling up your size too quickly I remember how happy I was after I started making around 100 rupees each day 100 rupees that’s five hundred rupees a week and then one day I had this brilliant idea what if I just add a zero at the end of my position sighs if I just use ten times my normal size then instead of just a hundred rupees I’ll make a thousand rupees a day and five days a week there’ll be five thousand rupees Wow what a genius plan let’s just say that very genius plan of mine didn’t really work out that well not only did I lose the small 100 rupees winds I built up the last few weeks I completely lost my account because you see I didn’t take into consideration all the emotional pressure that comes with scaling up so early if my risk was originally losing 50 rupees in order to make a 100 rupees now my new risk is 500 rupees in order to make a 1000 and while I was ready to make that 5000 rupees per week goal I was not emotionally ready to handle the 2,000-3,000 rupees losses when you scale up your position size to quickly that will lead to emotional trading so if you are thinking of scaling up that’s great good for you you’re on the right track but make sure you’re scaling up slowly according to your risk appetite and make yourself mentally prepare for the possible bigger proportional losses.
5. Following fake social media tips
Mistake No. 5 the beginner traders make following social media tips yes I do know I saved the most effective for last yes I’ve got mentioned before that I believe it’s extremely beneficial to trade with the same community of traders and find trade ideas but following social media tips to shop for and sell that’s a totally different story I believe following others will put you months if not years behind your journey to become a consistently profitable day trader and here’s why so first of all most of those social media groups that provide you with tips they tell you to require trade without breaking down why they’re doing so this creates followers which unknown a sheep who blindly buys everything the admin tells them to trade and guess what most of those sheep lose money because they need no idea why they bought the stock within the first place so when the stock just drops a bit bit all of them hit the bids to induce out and order out for a large loss I’m not saying you’ll never make any money following social media tips maybe if you’re fast enough with these hot keys and you have got no internet latency but in an exceedingly long term following social media tips will drain your account especially if you’re in these low flow to over the counter stock social media groups that have thousands of followers this is often what we call potential these groups pumps so picture this in your head the moderator start scooping up shares of those low floats low volume OTC stocks then he alerts thousands of his followers to shop for and guess what because these stocks are low volume and low floats the stock actually surges 30% to 40% with seconds seeing that the value has surged the admin tells everyone to book the profit after he has already locked certain an enormous profit and you recognize what happens next is most of followers sell at the identical time and like i discussed before if you’re lucky one with really fast internet connection you most likely made some profit but the bulk of these followers are going to be left trapped at the very top and holding the bag I’m very sad and embarrassed to mention that in my first year of trading I probably tried out five to 6 of those penny stock discussion groups and i have seen of these instances firsthand i used to be a sheep too and that i was left holding such a lot of loses. I felt that I deserve those losses because I used to be thinking that I will be able to follow some people and bag plenty of cash.
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