Before enlighten the repeating mistakes, it is necessary to understand that making mistakes in trading is a common phenomenon among traders, either with or without a trading strategy.
Ideally, we should learn from our past mistakes and figure out better ways to trade successfully.
Must Read: What are Common Psychological trading mistakes
However, we always find ourselves repeating mistakes in different trades.
Making the same mistakes over and over will never make you a better trader but will only lose you more money.
Part of your strategy should be to stop making mistakes and trade profitably.
Tips to Avoid Repeating Mistakes
1. Stick to a Trading Plan
Making the same mistakes is quite common with traders who don’t have or stick to a trading plan.
Do not be the person making the same mistake over and over by not having a plan or sticking to the one you have.
Have a good strategy for entering the market, protecting your position, and exiting the trade.
Having a good trading plan is a good thing but sticking to your plans is another thing altogether.
Avoid the pitfall of repeating mistakes in trading by coming up with a good trading strategy.
Also, you have a discipline of sticking to your plans and continuously review its effectiveness after some time.
A good trading strategy should protect your capital while maximizing your gains.
2. Treat Trading As a Business not Gambling
Treating Forex trading as a gambling activity will inevitably lead you into a vicious circle of repeating mistakes.
Gamblers put their emotions in trade, making them susceptible to the same mistake over and over as the excitement of greed easily overcomes them.
Wake up and treat Forex trading as a business venture but not gambling.
Gambling is addictive, and like all addictions, gambling should be treated professionally or get help to avoid repeating mistakes.
It would be best if you were responsible and prevent the greed/depression circle that comes with gambling.
3. Keep a Trading Journal
Are you making the same mistakes over and over again but don’t know how or why? Then you are probably not keeping a trading journal.
If you want to survive in this game for a long time and celebrate your wins, you are better off with a trading journal.
Keeping records of all trades will eventually reveal the hidden pattern that leads you to keep repeating mistakes.
The journal should contain records of your emotions, trades outcomes, and thoughts that should be analyzed periodically.
4. Do not Over Trade
Why do you make the same mistake over and over? Are you overtrading?
If yes, please, know that you don’t have to participate in every trade as a result of Fear of missing out (FOMO) emotion.
The emotion of FOMO motivates you to participate in many trades, including the bad ones.
Professionals and experienced traders will advise you freely – do not over trade.
Remember that opportunities will always be there, and FOMO should not control your mindset or interfere with your plans.
It takes courage, strength, and willingness to control your emotions.
5. Courage to Accept a Loss
How do you feel when you make a loss? Do you want revenge?
Revenge trading is another emotional problem that will make you make the same mistake over and over as you try to recover your losses.
Revenging will only lead you to more losses, despair, and frustrations. The Fear of losing always causes a trader to embark on revenge trading.
It will also helpful for you: How to overcome fear psychology in trading
Revenge trading will make you participate in many trade abandon trading plans, and increase your risks.
Forex trade has no emotions and is not affected by your revenge missions.
Loses are common in any financial trading. Accept a loss and move to the next trade.
Most importantly, learn to control your emotions and stick to your trading strategy.
6. Risk Tolerance
As you think of ways to stop making the same mistakes, also look at your risk tolerance.
Risking more than you can afford will drain your financial account so fast. It is wise to trade with money that you can afford to lose.
However, small losses over a long time will also significantly damage your savings and investment.
Most experienced financial traders keep a risk tolerance of 1%.
Even if a trade appears to be very profitable, always stick to your risk limits.
This calls for self-discipline and emotional control to trade within your risk limits.
7. Don’t Let Your Emotions Drive You
The emotion of greed often controls you to make the same mistake over and over.
Traders, who do not take profits out and continue for a more substantial benefit, make a huge mistake.
There is the potential to lose everything, including your capital. Do not let this happen. Take your profit and remain in the trade with protection orders in place.
Exit the position right when you start to gain the profit that you aimed for.
Do not stick around for too long and take profits when required as you might lose the gains quickly in a volatile trading session.
The emotion of Fear is another problem that causes traders to keep repeating mistakes.
Fear makes traders worried or scared because of negative news, making losses, losing profits, entering or exiting a trade.
Fearful traders tend to overreact thus making the same mistakes of cutting losses quickly.
You need to realize what Fear is. Fear is a natural response to a threat either by flight or fight.
Overcoming your fears is a big step to avoid repeating mistakes. Successful traders control their fears while losers are controlled by Fear.
8. Develop Self-Confidence
Repeating mistakes in trading arise from low self-esteem and not having trust in your market analysis. Therefore, you fall into the temptation of looking for more tips.
Tips are great when you can trust the person giving them.
Unfortunately, anyone can start a blog, try to sell information, and tell you they have the secret formula for currency trading.
The truth is—everyone has a different level of risk, starting capital, and goal for their money.
When you begin to listen to someone else’s strategy and try to adapt it to fit your needs—you will lose.
It is crucial to develop self-confidence and belief in your abilities to do a market analysis and participate in trading.
Conclusion
Forex trading is not simple. However, if you avoid repeating mistakes while sticking to your plans and managing risks, you will be profitable in the long run.
As you ponder over the tips, it is also essential to develop and sharpen your trading skills by learning and continuously practice at the free demo accounts.
