OUR BIGGEST ENEMY IN THE TRADING

Yes, Ourselves! Maybe some of you are aware of this, but during the trading we tend to forget that rule and our biggest bias is our mental behaviour and mental weakness. This is the real enemy not the broker houses or the other traders and investors. You really want to know what your biggest mistakes are – just take a close look at your portfolio – and ask help from Advocatus Diaboli. If you spend few days or weeks to analyse precisely your track records, you can find dozens of mistakes which need to be fixed to be better investor.

I suppose you will find the following most common mistakes:

• You buy at highs and sell the lows
• Super active trading style. You trade more than it would be necessary.
• You are reshuffling your portfolio more often and change the winners to the losers because they seem cheap. 
• You do not find any rational reason to open a position just opened because you heard something on TV or from one of your friends. 
• If you have profit on any position, you will cover as soon as possible and too early.

All these mistakes listed above help you destroy your performance. Maybe you are not a real loser – you can say –, but if you make better this list, your return will increase certainly. And why are we doing these things? Because we are irrational, folks. An average investor does not understand those points because it is against the human behaviour, but you can do it better, just start to try it.

The BFM Assets Team.