1️⃣ Open a trade without signal confirmation
Many traders see a drop at a certain level. They enter the trade immediately. But the market tends to have traps. Always wait for confirmation, such as the appearance of consolidation candles or a retest of a key level.
2️⃣ Ignore the current market condition
The indicator may give strong signals in a trending market, and completely useless signals in a ranging market. For example: the moving average works excellently in a trending market, but it continuously gives false signals in a ranging market.
3️⃣ All or nothing bet
The market is more like a marathon, not a sprint. Risking all your capital on one trade is a direct path to loss. It is preferable that this percentage be between 5% and 15% of capital for each trade. If the percentage is higher than that, it is considered a violation of capital management rules.
◀️ Tip: Always ask yourself three questions before entering any trade:
- What phase is the market currently in?
- Is there any confirmation for the signal?
- Does the risk align with my plan?
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