Top 5 traps for a beginner scalper
By Vladyslav Yudashkin Updated November 21, 2022
- Trading one coin for too long.
- Not taking breaks during the session.
- Exaggerating the importance of the DOM and feed.
- Not using risk management.
- Trading other people's signals.
When you start doing something new, there are always a lot of pitfalls ahead. If you know in advance what these traps are, it will be easier for you to recognize them in the future and avoid them, saving your money.
1. Trading one coin for too long.
In the morning, like all scalpers, you analyze the market and choose coins with the best patterns. Then you make your top 5 out of them, open in the terminal and get ready to start trading.
The problem that many beginners face is that they start implementing a great trading situation, but when it doesn't work out, they can't let the situation go and continue to trade worse and worse patterns. I saw traders who started trading hourly formations, and two hours later they traded formations for 1 minute. Since the smaller the timeframe, the lower the potential for movement, I won't even say how bad this idea was for their deposit.
2. Not taking breaks during the session.
How long can a person stay focused?
Some studies from the 1990s suggest that because of the way the attention cycle in our brain works, a person cannot stay focused for more than 90 minutes, after which he needs at least a 15-minute break.
When you start looking at the market, the DOM, the feed, it's all fascinating, but that doesn't mean that the longer you look, the better you'll understand them. In fact, the opposite will happen. Not only will you lose concentration, but you'll get tunnel vision, which will cause you to stop thinking and make semi-conscious decisions. It is another reason why many beginner scalpers don't survive their first month.
3. Exaggerating the importance of the DOM and feed.
You look at the terminal and see someone placing a huge volume, such that the price jumps by 0.5% at once. You immediately enter into a trade not to miss this express to Eldorado, but as soon as you enter, the price unfolds and takes away your stop order. Sounds familiar? That's why you should never be guided by the feed or the DOM for decision-making. These are your auxiliary tools, not the main ones. First the chart, then everything else.
4. Not using risk management
You look at your trades, and everything there is red, smeared with the blood of your deposit. You begin to look for an easy way to increase the success of your trades, and finally the archangel descends from heaven to Earth and whispers in your ear, "What if you didn't put a stop-loss?" You quickly look at the charts and find the holy grail – without stop-losses most of your trades would be profitable. I'll tell you how it is – the idea sucks. What will happen when the price goes in the opposite direction from you? How much will you lose? When will you close in the red?
When you have stop-losses, it is much easier to close losing trades, because this is your plan, which you immediately marked. And at the expense of red, do not worry: all beginners in the first months have red months. Learn from your mistakes and you will become better.
5. Trading other people's signals.
When you still have a bad understanding of the market, you may be tempted to trade someone else's ideas. But then what will you learn?
Even if your ideas are worse than others, trade them, work on mistakes, and you will grow. This is the most important thing at the beginning of your journey!
Trading other people's signals is simply shifting responsibility for one's failures to someone else and elementary laziness.
In trading you will not become a millionaire in a day. Be ready to learn and do your best, then you will succeed.
Good luck with your trades and see you at the DOM ✌️