Why This List Matters
According to ESMA, 70-80% of retail traders lose money. The majority makes systematic mistakes. The good news: these mistakes are known. If you know and avoid them, you automatically belong to the better half.
The 10 Mistakes
1. No Risk Management
Problem: Risking 5-10% per trade. Solution: Maximum 1-2% per trade. Always. Calculate position size before every trade.
2. No Stop Loss
Problem: Trading without a stop or with a mental stop you ignore. Solution: Hard stop in the platform before every trade. ATR-based for instrument-specific adjustment.
3. Overtrading
Problem: 10-20 trades per day. More trades = more costs, more emotional errors. Solution: Maximum 3-5 trades per day. Use Sentmo as filter: no extreme signal = no trade.
4. FOMO Trading
Problem: Buying at the high because everyone else is. Solution: Check sentiment first. If >80% are long, the train has left. FOMO is not a signal — it is a warning.
5. Counter-Trend Trading Without Reason
Problem: Shorting in an uptrend because "it has to fall eventually." Solution: Contrarian trades only with extreme sentiment (>75%) AND technical confirmation.
6. No Strategy
Problem: Trading on gut feeling. Solution: Write your strategy down. Instruments, timeframe, entry criteria, stop, target. If you cannot write it down, you do not have a strategy.
7. Too Many Instruments
Problem: Following 20 instruments, missing half, badly analyzing the other half. Solution: Focus on 3-5. Use Sentmo's filter function.
8. Taking Profits Too Early
Problem: Closing at +50 points when your target was +150. Solution: Fixed take-profit. Do not intervene manually. Or use a trailing stop.
9. Revenge Trading
Problem: After a loss, entering a bigger trade to "get it back." Solution: Fixed daily limit (3% maximum loss). When reached: stop.
10. No Documentation
Problem: You do not know which trades worked and which did not. Solution: Trading journal. Minimum: date, instrument, direction, entry, stop, target, result, sentiment reading from Sentmo.
How Sentiment Data Prevents 5 of These 10 Mistakes
Overtrading → no extreme signal = no trade. FOMO → 80%+ long = train has left. Counter-trend → sentiment confirms or contradicts. No strategy → sentiment as fixed rule component. No documentation → sentiment reading as part of the journal.