This article has been translated from English to Gen Z Slang.
Did ya know that the top five reasons traders flop are pretty much a self-own? 📉🤦♂️
Tons of traders are out here self-sabotaging their vibes and don't even notice. When their accounts hit rock bottom, guess what? There's no one else to blame but themselves. 🤷♂️
It might be a bit late for those peeps, but you're still in the game. 😉🙌
We're here to make sure you don't hit the same blind spots and, just maybe, avoid nuking your account. 🚀
For easy memz, we call these five bad vibes the “O’s of Trading”.
Plus, there’s this keto cereal inspired by them – lit 😂.
A lot of traders have eaten this metaphorical cereal. Even the vegans. While it looks tasty, if you wanna keep slaying in trading, avoid this in your diet. 🥣🚫
What's the tea on the 5 “O’s”? ☕
- Overconfidence
- Overtrading
- Overleveraging
- Overexposure
- Overriding Stop Losses
Let’s break down each “O” to see the drama. 🔍
Overconfidence
Overconfidence isn’t just thinking you’re a boss at everything. It’s basically you getting delusional about your own trading mad skills. ✨💪
Confidence is the vibe if you wanna cash in on your trades. When you’re vibin’, you’re more prone to dive into risks or find some sick opportunities. 🚀
But it’s one thing to think you might score some profit. It's another thing to feel like Mr. Know-It-All about the markets like you’re never gonna lose. Like, bro, you are not DJ Khaled. 😅
Confidence’s cool and all, but if you’re too much about it, it could backfire. 🚫
This is what we call the overconfidence effect.
The overconfidence effect is a cognitive bias where somebody believes they’re a bigger deal than they actually are. Like, if your belief is all pumped up that your judgements are solid when they’re not, that’s the tea.Long story short, when you’re riding high on confidence, you see yourself as more fire than any neutral homie would think of you. 😂
Psychologists catch overconfidence sneaking in as:
- Overestimation
- Overprecision
- Overplacement
Overestimation is when you think you’re crushing it when, in reality, yikes. 🤦♀️
Overprecision is feeling like you’ve got all the facts when, truth is, ehhhh 🙄.
Overplacement is placing yourself higher in the lineup than others would. 🚀
Basically, overconfident peeps think they’re a class apart and have mad precise knowledge and wild skills. 🔥
Like, if you ask Joe on the street how lit his driving skills are, he’d probably say he's better than your average Nancy! 🚗
If everyone's killin’ it as a driver, where’s the basic club at? 🤷♀️
To keep overconfidence in check, you gotta get real about yourself and your skills. Know what you can slay and which paths you just should bench on. 🏆
It’s a whole mood to think you could be WRONG. Stay open to fresh evidence and know when to switch up if the stars align differently. 🌟
Have the confidence in trading, but pair it up with some intellectual humility, fam. 💡
Overtrading (including Revenge Trading)
Overtrading is when you’re way too extra on the trades, going wild with massive trades, or just tossing dice with risky bets. 🎲💸
Winning traders are patient AF. ⏱️ Quality setups take their sweet time to show, so they wait it out. 😎
If it takes two hours or two weeks to happen, they don’t care.
What’s key is keeping their coin safe, they wait till it's basically a sure shot before jumping in. 🤞
You KNOW if you’re overtrading. If a trade flops and your gut says, "should not have", oops, that's on you. 😬
Like, if you’re supposed to trade on the daily, but end up deep-diving into lower time frames like the 5-minute chart for some “lit” trades, that’s a sign. 🤦♂️
Are you stuck watching charts 24/7 trying to force magic trades out of meh setups? 🪄
Spending non-stop hours in front of charts leads to overtrading 'cause you’re sucked into the vibes of price action. Then, you start seeing unicorn setups that are mirages fam. 🦄
Revenge Trading
Feelings vs Trading? Not even close. Go with the brain, not the heart. ❤️🧠
After big losses, you might be tempted to “revenge trade”. Like you think you can teach the market a lesson, ha! 🤖
Revenge trading is hopping back in after a flop, convinced you can turn it around ASAP. 🙄
If you’re in this space 👆, your mindset is so skewed. 🤯 You risk more slip-ups and more losses. 💸
How to dodge revenge trading?
- Keep your head in the game, be present AF. 👀
- Ensure your vibe checks out, not loaded with freaky feelings like anxiety, fear, or impatience. 🧘♂️
- Have a whole trading plan, and stick to it! No freestyling when you’re dealing. 🚫 🎼
If you wanna win at this trading gig, ya gotta play the long game. ⌛
Don't sweat over one L or a week of misses. Keep the bigger picture in focus – like how you're doing over months or even years. 😎📊
It might sound easy but don’t let the numbers fool ya. Trading’s a patience game.
Focus on the process, not the dollars. 💵 The traders who chill, spot the good stuff, and hang tight are the ones cashing in for real. Focus on the process. 🕰️
Overleveraging
In the wild world of forex, leverage is your ticket to play big with a tiny amount of cash. 💸😉
Like, with just $1,000, your broker might let you control a $100k position. That's a whopping 100:1 leverage, bro. 😱
The lit part? You can boost your wins with just small stacks. 💰
The not-so-lit part? It can turn your Ls into epic fails and torch your account real quick. 🔥🙈
When you're vibing with massive leverage, even a tiny price shake can KO your whole balance. ⚠️
Bigger leverage level equals bigger mood swings in your account balance, usually ending in a margin call. 🚨📉
When your balance is doing its own rollercoaster ride because of your crazy leveraged moves, stay strong and don't let it mess with your head. 😵People around you are probs not feeling your stressed-out energy. 😬
But when you trade with little (or zero) leverage, you’re giving your trades space to chill and keeping your money safer. 🌬️
This way, you can set wider stop-losses without risking it all. 😌
More leverage = more risks per trade = more headbanging. 🤯
Getting the leverage-equals-account-balance link on lock is clutch ‘cause it rigs your true leverage game. 🎮
Peeps did a study and here’s what popped about a forex broker crushing the profitable traders vs average true leverage stats. 📈
Check them receipts – as true leverage goes wild, profits catch an L big time! 📉🥲
40% got the bag using leverage of 5:1 or less, but dudes at 25:1 and up struggled to stay at only 17%. 📉
Pro traders play it smart at low true leverage, like never exceeding 10:1, and that's how they stay in the winning lane. 🌟
Even if your broker brings you the leverage buffet, you can make like a pro and keep it low by dropping more in your account and playing it safe with position sizes. 🤓
Go for the 10:1 or less true leverage. 🙌
Keep the vibe at 10% or less of your account in the risk zone. Don't cross that line where your trade's bigger than 10x your equity. 🚫
To pull off real leverage levels in a single trade, just divide the trade size by your equity. 🤓
Hold $5k? The 10:1 leverage says, stop at $50k position tops (or ~5 mini, 50 micro lots) at once. 🤔
The lower your leverage, the more chill you’ll be. Like 2:1 means stays safe at $10k positions max (or ~10 micro lots). 🙏
If you're about that trading longevity, less leverage is best. 🙌
Just because you got access to monster leverage doesn’t mean you gotta flex it! 🚫💪
Kicking off your live account? Zero out leverage, fam. You’re welcome. 😊🚫
Throw $5k in your trading account and let $5k positions (or ~5 micro lots) be your cap. Keep it chill. 🧘♂️
As you get your game on, you’ll peep when to leverage smartly to chase your goals. 🏆
With any leverage in play, safety first, homie. 🚦
High leverage equals, naw, to profits. 🙅♂️
What even is leverage and why tho? Dive into leverage before it eats your account. 😳
Overexposure
When you’ve got multiple positions poppin’ in your trading turf and they’re all about a different currency pair, peep your RISK EXPOSURE game. 📊🔥
Like, trading AUD/USD and NZD/USD back-to-back is basically rolling with identical moves because they usually sync up.
Even with two solid setups on both pairs, maybe skip and choose ONE. 🤔
Instead of spreading risk, you might just be doubling down unbeknownst! 🚨
Unknowingly upping the risk game – that’s overexposure y’all.
If you’re not trading one pair at a time, it’s a must to know how different pairs vibe together.
Get the deets on currency correlation.
It shows how two pairs interplay, same way or opposites, or just go wild during a timeline.
Spot how correlations influence risk in your trading game.
If you’re cluelessly dealing with many pairs in your account mix, don’t be shocked when the balance ghosts ya. ☠️
Are you raising your risk up unknowingly? Learn more about currency correlation. 🔗🧠
Overriding Stops
Stop losses are those lifesavers that auto-close your positions once they see the water twisting. 🛟
It’s tough realizing you’ve messed up, but letting your ego chill can keep you in the scene longer. 😅
Do you have the mettle to commit to your stops? 🤞
During the heat, winners vs none comes down to following plans religiously.
Traders, especially green ones, fall into self-doubt when L’s hit hard. 🥺
Negative headlines like, “I’m over the edge anyway. Let’s hold. Maybe it turns now.” Saul, stop right there. 🚫
If your stop markers get dinged, close the flopped scene.
No expanding stops. 🚫
Definitely NEVER remove your stop to “Let it ride!” 🏄♂️
Renegotiating stops means pep-dog levels of risk and losses. 🚫💀
If that line’s hit, delete the flop and grab the next chance. 🚀
Holding wide stops is having no stops – that’s a lose-lose, buddy!
Stops save you from more bad times, letting you move on. Get the scoop on different stops and how to dominate them. 🤓
