I have been coaching a number of traders recently, and it gives me great insight on the primary flaws that most traders face.  In addition to most traders lacking a written plan, I can see how many traders are trading for many of the wrong reasons. See how many of these reasons look familiar to you

There's really only one reason to trade in my book: that's to MAKE PROFITS OVER TIME. This comes from developing your edge and consistently executing your plan to take profits out of the market. For me, defining low-risk entry points is critical, to keep losses small while giving myself increased odds of much bigger winners. Read on below to see how many of these other motivations may creep into your trading at times.

1. Trading to Be Right - The ego is a powerful force, and many traders succumb to the ego's need to be proven right. This leads to the inability to take a small loss, and big losses result (as the saying goes: "most big losses started out as small losses"). So you have to define your plan and follow it in getting out of losses relatively quickly, while also avoiding the temptation to take profits too quickly, as that's another ego need to want to book a profit just to feel like a winner.

2. Trading Too Large - Another ego belief is that when we have a really strong feeling about a stock, we are inclined to load up and try to hit the home run in our portfolio all at once.  This not only leads to excess financial volatility when one of these gut picks fails, but it also leads to psychological challenges in continuing trading as the individual is disappointed to be wrong. You have to realize that trading is a probability game, where even the best researched ideas may have some risk of going against us for a variety of factors that we may not have been able to forsee.

3. Trading In Desperation - Sometimes when a loss gets out of control due to a lack of stop-loss discipline, a trader will do dumb things like double down to average his cost down. In my book that's usually a desperate move to throw more good money after bad. It's usually best to admit your mistake and move on to fresher, and hopefully more profitable, ideas.

4. Trading with Fear of Failure - This fear can be debilitating, as worries about failure can lead the trader to wait on new trades too long until every indicator looks perfect. Often by that time, the opportunity is no longer fresh and the trader may get in right before a coming reversal. So seek to define your method, using the Keep It Simple principal to avoid the fear of failure. Also, consider trading a smaller sized position for a while if you're worried about losing, with the goal to follow your rules, win or lose.

5. Trading for Revenge - Some traders want to get back at a stock or at the market after experiencing a loss. Contrary to what some day trading books used to teach about how you should walk away in an hour after hitting your goal, my experience has been that there are indeed good and bad streaks in all trading. You have to know when the wind is not at your back and lighten up, rather than plowing back in too quickly to endure more pain. Also, when the tide turns in your favor, don't take small profits and walk away - keep coming back to what is working while it works.

6. Trading to Join the Crowd - Some traders want to trade what everyone else is putting their money into, like the tech bubble in 2000 or the real estate bubble in 2005. Thanks to school and general socialization, we're taught to accept the middle road, while most feel uncomfortable taking a stand against "authority", in this case the conventional wisdom of the so-called experts and the media. Most of the best trades come from defining some "variant perception" as famed hedge fund manager Michael Steinhardt put it. It's this different perception that can lead to a windfall as market players gradually come around to your way of viewing the stock, pushing it much higher (or lower if you see a bearish angle others have missed).

7. Trading for Excitement - One of the traders I recently coached noted to me that she want to trade because she was bored in her job as an accountant. While I can understand that, I asked her how her results have been. She admitted that the losses have mounted more quickly as the adrenaline-seeker in her started chasing into more volatile stocks. Plus if you have to get action everyday, your trading costs will also go up. So make sure you are trading for results, not activity.

That's just a few of the biggest issues I often run into with traders recently. One of the first steps to help you get out of these wrong-way thought processes is to journal and catch yourself thinking in a way that's not helpful to you making money over time. Are you afraid to take a loss when your method says you should? Are you getting out of winners too quickly? Are you stuck in hope, fear or greed mode? Journaling can help you identify and snap out of these modes of thinking, and get you back on the right track to profits.

Price Headley is the founder and chief analyst of BigTrends.com.