Hubris: A foolish amount of pride or confidence. No matter how good of a trader you think you are the market is always bigger and you will not win an argument with its price action no matter who you think you are.
Fear: Cutting winners short because of unwarranted fear eliminates all the big wins. Being afraid to take a good entry because of fear of loss creates a loss of a potential profit. We have to do enough homework about our trading methodology to trade our system with confidence.
Laziness: Looking to be given trades instead of doing the work to develop their own system leads to failure. Trades only have meaning inside a robust system consistently followed with discipline and risk management.
Greed: The greedier a new trader is to make a fortune the higher the probability and speed at which they lose their whole trading account. The dark side to going for the huge winning trades with big position sizes is the huge losses when wrong. Money is made in the market through managing risk so you are able to keep the profits from your winning trades. If a trader does not manage risk and position sizing their winning trades are meaningless because they will eventually give back their profits with their starting capital in the longer term.
Fear: Cutting winners short because of unwarranted fear eliminates all the big wins. Being afraid to take a good entry because of fear of loss creates a loss of a potential profit. We have to do enough homework about our trading methodology to trade our system with confidence.
Ego: The desire to be right more than the desire to make money leads to losing money, a lot of money. The ego causes traders to hold losers far too long and to brag themselves into a corner about their own predictions. The best traders are simply slaves to the market’s price action.
Laziness: Looking to be given trades instead of doing the work to develop their own system leads to failure. Trades only have meaning inside a robust system consistently followed with discipline and risk management.
Greed: The greedier a new trader is to make a fortune the higher the probability and speed at which they lose their whole trading account. The dark side to going for the huge winning trades with big position sizes is the huge losses when wrong. Money is made in the market through managing risk so you are able to keep the profits from your winning trades. If a trader does not manage risk and position sizing their winning trades are meaningless because they will eventually give back their profits with their starting capital in the longer term.
Source: newtraderu.com
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