Updated: Aug 27, 2019
1. The high leverage
2. Different strategies interference
3. The changing reward/risk ratio
4. Reverenge trades
5. False info & communications
6. Trade the non-trade zone (consolidation/expansion zone)
7. Chasing the whales. The whales can move the price up and down without any indications and they can lift off from the ground immediately then crash back. Most people rekt because of this kind of price action. Don't chase the non-logical movement.
8. Looking at the weekly chart with leverage. Even it is a 3x leverage, when trading the weekly chart, stop loss can be more than 10%, which is a 30% loss in one trade, that's almost as same as scalping with 30x, plus the weekly opportunity cost. This is the worst and selfe cheating plan that trade with low leverage and focus on the big picture. People always say, the bigger time frame is more reliable and low leverage is healthy. But a huge time frame times a low leverage shares the same risk as an extremely high leverage with small certain scalping pattern. Most traders including me made this horrible mistakes unconciously.
In the market there are logical and non-logical movement. The logical movement can be quantified by divergence, fundamental, sentiment, reversal patterns and candlestick patterns. But the non-logical movement is aiming at testing the market pressure, get rid of the weak hands, hunting the stop loss and performing reaccumulation/redistribution.
The best way to avoid the traps created by non-logical movement is very simple. And this is the number one rule for trading: Do not trade what you haven't expected. Even that's a 300%+ opportunity, if it's not in your logical plan, let it go. And the benefits of focusing on the logical plans will increase from time to time: the probabilities will be accumulating and also there will be more detail understanding added into the system from time to time.