Reblog: 7 Expensive Things for Traders


  1. Trading with no stop losses. You can’t control how big your profits are, the market will trend as far as it does. However, you can control and limit the size of your losses with a stop loss and a carefully managed positions size. Not having an exit plan if you are wrong can be very expensive when a trend takes off against your position and you start hoping instead of just cutting your losses and moving on.
  2. Your opinion can cost you money. Trading your opinion against all other market participants can be very expensive. The market goes where it wants and when you disagree with where it is going it will cost you. Going with the flow in your time frame is the best way to make money. Fighting the flow of the market can be expensive.
  3. Egos are expensive things. Inflated egos cause a trader’s #1 priority to be proving they are right and refusing to admit when they are wrong. It is very expensive for ego gratification to be higher on a trader’s list than making money.
  4. Trading off predictions can cost a lot of money when they are wrong. There is more to be made by reacting to what the market is doing instead of predicting what you think it will do later. The future does not exist and it is expensive to pretend like it does.
  5. Stubbornness causes small losses to become big losses. It causes a trader to make the same mistake over and over because they do not assimilate feedback. Instead they keep doing the same thing over and over and expect different results but keep getting the same results. Stubbornness is expensive.
  6. Not having an exit strategy for a winning trade can be very expensive. It is possible to ride a big winning trade back to even. If there is no plan to lock in profits while they are there a winning trade can even turn into a big loser. Trailing stops and targets can put the profits in the bank.
  7. Trading too big of position sizes for your account can be very costly because no manner how good your winning trades are you are set up to give back the profits with a few big losing trades in a row.

The original article posted by Steve Burns appears on newtraderu.com and is available here.

stockarchitect September 4, 2019

Exit Strategy / mistakes / newtraderu.com / Steve Burns / Stop Loss / Trading /

Reblog: A Guide To Stop Losses


“Whenever I enter a position I have a predetermined stop. That’s the only way I can sleep at night. I know where I’m getting out before I get in.”- Bruce Kovner

The biggest reasons traders end up unprofitable is simply because their big losses knock out all their previous gains.

If you went back and removed your biggest losses over the past few months or year what would your trading results look like? Many of the best traders I know did this at some point in their trading careers and had an enlightening moment. The major factors that made them unprofitable or caused them big draw downs in capital were the big losses. The roots of the big losses were usually based in emotions and ego not a market event. A big loss is almost always caused by being on the wrong of a trend and then staying there.

What are the top 10 root causes of big losses in trading?

  1. Too stubborn to exit when proven wrong: You just refuse to take a loss; you think a loss is not real as long as you do not exit the trade and lock in the paper losses.
  2. Too much ego to take a loss: You are on the wrong side of the market trend but think if you hold a losing position you can be proven right on a reversal. While you are waiting to be proven right your loss gets bigger and bigger.
    Continue Reading →

stockarchitect July 31, 2019

newtraderu.com / Steve Burns / Stop Loss / Trading /

Reblog: Avoid These 7 Beginner Trading Mistakes


When you first start trading, the most likely short term outcome bar far is that you will blow up account.And then quit. But it doesn’t have to be this way! If you avoid these simple beginner trading mistakes then I guarantee that you will have a better shot at trading long enough to become consistently profitable.

Ninety percent of traders lose ninety percent of their money in ninety days. Or so we are told. No one really knows if that is true. Avoid these 7 beginner trading mistakes and hopefully you will avoid become a trading casualty statistic!

  1. Trading too large

Blowing up your account need not be inevitable. But if you insist on risking five, ten, twenty…even one hundred percent of your account on your first trade, I can almost guarantee you that you will eliminate your trading account long before the ninety days are up.

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stockarchitect April 18, 2018

Beginner / Bloomberg / Book profit / mistakes / Stop Loss / Tips / Trading / twoblokestrading.com /

Reblog: 10 Powerful Trading Tools


A trading tool is anything that has a function that helps you be a profitable trader.

  1. Back testing software is a tool that helps you see what type of price action trading signals were profitable in the past price data.
  2. An entry signal is a tool that tells you when to get into a trade because the odds are in your favor for a winning trade.
  3. A stop loss is a tool that limits the size of a losing trade.
  4. A trailing stop locks in open profits when a trend starts to bend.
  5. Position size determines how big your trade should be based on market volatility.
  6. A profit target is a tool to measure the potential reward if your trade works out.
  7. Moving averages are tools for quantifying a trend.
  8. Passion for the markets is the powerful internal trading tool that gives you the energy to do the needed work to be a profitable trader.
  9. Perseverance is a psychological trading tool that keeps you going even when you want to quit.
  10. Self control is an internal trading tool that enables you to follow your trading system regardless of your emotions.

Your greatest trading tools are going to be perseverance and self control. These are the only things that will buy you the time to learn how to build a profitable trading system, and once you have developed a system that works to then follow it long term.

This article was written by Steve of newtraderu.com and can be found here.

stockarchitect March 28, 2018

perseverance / self control / Stop Loss / tools / Trading / Trailing Stop /

Reblog: Stop Loss – Advantages and Disadvantages


Stop loss is one of the three fundamental parts in trading ( the other two are take profit and entry). The subject of Stop Loss (SL) is very important and interesting to discuss thus this article! I would like to go over some of the advantages and disadvantages of using a stop loss as opposed to trading without one. I would love to hear your opinion on the subject below in the comment section – thank you!

So let’s begin:

First of all: An advantage for one trader could be a disadvantage for another one! Remember that, it is all strictly individual and you must find your way and what it works for you. There is no reason why two traders, one who uses SL and one who doesn’t, won’t make money at the same time.

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stockarchitect February 19, 2018

Advantage / Disadvantage / Leverage / Profit / Stop Loss / trader / Trailing Stop /

Reblog: Know Your Range aka How to Set Your Stop Loss ⋆ 5-To-9 Trader


There is nothing more frustrating than getting stopped out of a trade only to watch the price go back to the initial direction you were trading in the first place.

It’s grating, I know.

Assets, like animals, have different types of characteristics. Some are fast, some are slow, some jump high, some jump low. Understanding the behaviours and patterns of your chosen assets will help you set your stops at reasonable levels.

With this post, I’ll share a simple method of placing your stops in a way that is realistic and decreases the chances of getting hit every single time.

Continue Reading →

stockarchitect August 21, 2017

5to9trader.com / Range / Stop Loss / Trading /

Reblog: When Should You Move a Stop Loss to Breakeven?


forex breakeven stop loss

This week’s question comes from John, who asks:

When should a trader move a stop loss order to breakeven?

This is one of the more common questions among Forex traders. It’s also one of the most challenging to answer because it depends on several variables.

And it makes sense that it’s a common dilemma. After all, who doesn’t want to be in a risk-free trade?

But believe it or not, moving a stop loss too soon can be more harmful than taking a full loss.

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stockarchitect August 16, 2017

breakeven / Stop Loss / trader / Wedge support /

Reblog: How to Maintain Control and Discipline in Your Trading


If as a TRADER you want to have disciplined and profitable trading, The Core Concept you need to Understand is

As a Trader, you do not have any control on the market.

Nil Control on Market

You’ve either figured out or you will figure out the fact that not much at all remains under your control as a trader. Dealing with an endless set of variables using a mind that’s geared by nature to defining constants is a tough task.  Most of traders focus on returns and not focusing on the process of trading.

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stockarchitect July 5, 2017

Brahmesh / Bramesh / Emotions / Profit / Returns / Stop Loss / strategy / trader / Trading /

Reblog: The Worst Mistakes Beginner Traders Make


Traders generally buy and sell securities more frequently and hold positions for much shorter periods than investors. Such frequent trading and shorter holding periods can result in mistakes that can wipe out a new trader’s investing capital quickly. Here are the ten worst mistakes made by beginner traders:

1. Letting Losses Mount

One of the defining characteristics of successful traders is their ability to take a small loss quickly if a trade is not working out and move on to the next trade idea. Unsuccessful traders, on the other hand, get paralyzed if a trade goes against them. Rather than taking quick action to cap a loss, they may hold on to a losing position in the hope that the trade will eventually work out. In addition to tying up trading capital for an inordinate period of time in a losing trade, such inaction may result in mounting losses and severe depletion of capital.

2. Failure to Implement Stop-Loss Orders

Stop-loss orders are crucial for trading success, and failure to implement them is one of the worst mistakes that can be made by a novice trader. Tight stop losses generally ensure that losses are capped before they become sizeable. While there is a risk that a stop order on long positions may be implemented at levels well below those specified if the security gaps lower, the benefits of such orders outweigh this risk. A corollary to this common trading mistake is when a trader cancels a stop order on a losing trade just before it can be triggered because he or she believes that the security is getting to a point where it will reverse course imminently and enable the trade to still be successful.

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stockarchitect June 19, 2017

Averaging / down / Elvis Picardo / Herd / Homework / Investopedia / Leverage / losses / Overconfidence / Plan / Stop Loss / trader /