It took a long time for me to realise that traders quickly fall for obvious trading habits which excite them initially, but over time, they negatively impact trading journey. Since everyone talks about these habits, many of the traders follow them regularly and at a point, they won’t be able to break those habits even if they want to: 

5 such overrated trading habits that you need to avoid eventually are: 

1. Trying to win all the time: The reality is that the moment you take the trade, there is no guarantee of winning that trade. What is in your hands is to do the right kind of analysis, set proper stop loss and trade with the right position size. The rest is up to the market. No matter how much commitment you have to win the trade, it won't help in any way. Because every single trader wants to win, but it doesn’t mean that they will win, 90% of them might lose. So, just because you want something, it won’t happen like magic. However, this behaviour will negatively impact you, forcing you to hold on to the trade even if you lose it. You might even tend to increase the stop loss with a hope of recovery move. Also, if you want to win all the time and prove yourself to be right, then your ego will come into play, and if you lose any trade, it can hurt your ego, and you will tend to indulge in revenge trading to prove yourself, and it mostly won’t work. Remember that to sustain in the market, you must be profitable over time; no one cares if your view is right or wrong.

2. Consuming too much of content on trading : With the rise of content on Finance and trading, especially from 2020, unlimited videos will teach you a new strategy. Some of them might be good, and others might be creating content just for the sake of it without even really testing it enough with the real capital. When you are in a complete beginner phase, you can learn technical analysis from almost any good video, which can help you get good with the basics. When you are in a growth phase, you need to start building your trading plan according to your trading style and risk appetite; in this phase, if you keep looking at every single new video out there, it will mostly mess up your original plan that you were building. After a point, your mind will be overloaded with so much information that you won’t understand what to follow during the live market. As much as possible, you need to keep your trading plan simple and original and stick to it for enough time; then, modifying the plan will be fine based on any new information. This is the main reason why the loss-making traders’ ratio is still 95% + even with a wide spread of online information. Consuming more and more content doesn't mean you are doing better. Build the skill of consuming the right content and ignore the ones that don't fit your trading plan.

3. Not treating the profits properly: It means seeing different amounts of money in different ways. Say you have 50k capital, and you made 10k profits. You may tend to treat that 10k amount differently than the original capital. You might give less importance to 10k and tend to take high-risk or low probable impulsive trades with that 10k because your mind says, “Even if I lose, I am losing only the profit but not my original capital.” This kind of Bias is called Mental Accounting Bias which will never let your trading capital grow as you keep risking your profits unnecessarily. I made this mistake many times, and even now, I am working on getting rid of this behaviour.

4. Getting influenced by looking at P&Ls & Profit Screenshots: Who doesn't; want to make money in trading, everyone's main purpose is the same, but everyone's knowledge, skills, capital, experience and way of managing emotions will be completely different. If you learnt the exact strategies from someone making money, still there is not even a 1% guarantee that you will also make such profits. Taking inspiration and learning from experienced traders is a good habit, but If you start building wrong expectations based on that without even having 1 to 2 years of practical experience, then you are doomed.

5. Scaling up too quickly: The beginner traders usually make quick money from the market because they do not act out of fear; they know a little and apply that. It's also called beginner's luck. This false belief can make them believe that trading is easy, and they quickly increase the capital or position size immediately to make higher profits. That is when they start losing big. This can also happen when the markets are bullish overall without much volatility, where many strategies will work well.

There is a saying, “ Everyone is intelligent in Bull Market.” 

 Do not conclude very quickly based on a few months’ results. You need to be able to tackle all types of markets or at least be aware of when not to take the trades, when not to increase the position size etc. Also it would be much helpful if you start replacing those habits with the ones bwelow.

5 underrated habits that you can start developing are:

1. Accepting losses without Regret / Frustration: It's evident that even if you have a 70% win ratio and take 100 trades, you will undoubtedly face a loss in 30 trades or more. It has to be treated as a normal SL hit and move on with other trades. Ultimately, the Probability will pay off if you correctly follow risk management.

2. Not to keep looking at the P&L once you have entered the trade: It could be overwhelming to see the P&L going up and down constantly. It can negatively impact your mindset to change the stop loss or to make the early exit out of fear. Instead, place the stoploss and leave it. You can keep some alerts at target levels, and once it hits that, you can see the chart and adjust the position.

3. Maintaining Active Lifestyle: Trading is mostly a mindset & emotional game, and your physical health can significantly impact your mood. Sticking to a screen and sitting in one place all the time may have long-term negative impacts. Make sure to adopt an active lifestyle by either working out / walking / or doing some physical activity regularly.

4. Set time in a week to analyse your Loss Trades : Even if not daily, you at least need to spend an hour looking at and analysing your loss trades in that week. No one can better teach you than your own mistakes. Make sure of the loss trades to learn where you went wrong. It's the best and most reliable way to learn faster.

5. Take Needed Breaks : Do not get addicted to trading, its not a healthy habit. You must be able to disconnect from trading as and when you want. Even if you are Intraday Trader, there is no need to take trades every single day. Also there is no need to be infront of the monitor exactly at 9:15 unless you are carrying some risky over night positions. Sometimes when you feel nothing is working out in the market, take long breaks like 3 to 6 months and allow the mind to reset.

Trading is not easy, it takes so much of psychological pressure to handle the emotions and losses if they happen beyond the limits.

Learn to detach and allow yourself to not look into the markets once in a while. Once you become addicted, it can mess up with your personal life. Learn to create a balance and do not keep thinking about trading 24/7

Hope this blog helped you to get some clarity on Trading Habits.