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Common trading mistakes, and how to avoid them
Most losses by new traders do not come from bad luck. They come from a short list of repeated mistakes, and each of them can be avoided with a little planning.
Trading without a limit
The most expensive mistake is not deciding in advance how much you can lose. Without a number, every dip feels like a reason to put in more. Decide on an amount you can lose without hurting your household budget, and treat it as spent before you begin.
Chasing what has already risen
An asset that has doubled in a week is exciting, and most people who buy after that kind of rise buy near the top. Prices that have run hard are as likely to pause or fall as to continue. If you would not have bought it a week ago, ask why it is more attractive now.
Putting everything in one place
Concentration magnifies both gains and losses. Holding a single asset, a single exchange or a single strategy means one event can take most of your capital. Spreading out is dull, and it is also what keeps a bad month from becoming a bad year.
Ignoring costs
Fees, spreads and conversion charges are small each time, and large when added up. A strategy that trades often needs to earn more just to break even. Check what each transaction costs before you decide how active to be.
Leaving security until later
Reusing a password, skipping two-factor authentication or clicking a link in a message has cost many people their accounts. Taking ten minutes to secure everything first is the best-value step in this list.