Two Common Trading Pitfalls and How to Avoid Them

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10 Most Typical Pitfalls in Project Management and Ways to Avoid Them

A good project is something that unites plenty of details. It consists of a skilled manager and a team that performs tasks. It includes a circumspect plan that covers all major as well as minor issues and many more other crucial things.

These «many more other crucial things» are integral part of any project be it something simple or vice versa, complicated. In any case, projects may face a variety of pitfalls. And an experienced manager should know how to avoid pitfalls that are so likely to be met on the way to project accomplishment.

In this article I cover problematic points that jeopardize successful project fulfilment. One can single out even more pitfalls. As for me, I decided to go into details with 10 issues that are typical for most projects.

What are pitfalls in project management?

Pitfalls definition is quite clear. They are any things or processes that hinder your project from successful accomplishment. They have different nature, but according to some common features these problematic points can be united into groups.

So, what are they?

1. Poor communication

Number 1 point in any project. I would say even more – communication is the driving force in great majority of situations that happen in the world. It is very important to have a constant talk with each member. Thus a manager gets ongoing feedback, updates colleagues and simply shows that he is not a boss with tough management style, but a leader who can discuss even yesterdays’ TV-show.

Ways to improve

Choose proper channels of communication. If you create a chat in a messenger, make sure everyone involved is presented there. Or if you need to have instant communication, do not write emails as it is time consuming and ineffective for quick conversation.

Do not forget about conversation face to face. Hold meetings on a regular basis and choose the right way to speak to your colleagues.

2. Lack of trust and delegation

A manager should remember that a project is not only about him. It is his team that also performs tons of tasks. It shouldn’t sound surprising but everyone involved in a project is responsible for it. So it’s better not to take all tasks for yourself with minimal level of delegation. Such a management manner says only one thing – a manager doesn’t trust his colleagues.

Ways to improve

To avoid this pitfall in project management, a manager can delegate tasks to people who will do their best to accomplish them. Moreover, trust and delegation has a psychological impact on participants. They boost morale and everyone feels like a part of a team and not just gears in a complicated device.

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Listen to your people and consider their opinion.

3. Unclear roles, responsibilities and deliverables

To be aware where everything goes, everyone has to know roles and responsibilities as well as what is expected at the end of a project. It is necessary to have everything clarified from the very beginning. Thus teams get more organized and self-managed.

Ways to improve

Hold a meeting at the very beginning where all expectations and overall course will be set. Put all critical information down in a project scope statement. You are free to refer to this document at any project stage when there is a need to clarify things and not to let everything go in the wrong direction.

4. A poorly created project plan

Pitfalls of planning in management also include a project plan, or, more precisely, a poorly created one.

What is a project plan? It is a formal document where all decisions with project scope and other relevant information are included. A skillfully prepared plan answers all questions about a project, therefore, its preparation requires deep knowledge and skills from a manager. But in the end it avoids from unnecessary pitfalls.

Ways to improve

Do not even try to manage projects without a made up in advance plan. Be aware that it should answer the following questions: why?, what?, who? and when?

If something goes wrong, it may lead to pitfalls and project scope creep that implies uncontrolled changes and growth of initially planned scope.

5. Lack of breaking down projects into smaller tasks

Projects are usually huge and long-term. You will probably agree that with an intangible task that is supposed to be finished in a few months, it is difficult to bestir yourself to work. It is the psychological moment that inheres in human beings.

Way to improve

To avoid these pitfalls in project management, divide all work into pieces with clear short-term time limits, clear objectives and tools to perform them. Thus you create atmosphere where team members feel comfortable about manageable tasks and time limits. A task that takes only a week sounds better that a 3-months project, doesn’t it?

6. Weak resource management

Resources also make up projects. They have different nature. Some of them are material like equipment. Some of them refer to labor force that consists of all team members. Other resources are based on costs.

Ways to improve

What concerns labor force, it is pretty easy to avoid one of the common pitfalls in project management. Make sure you custom your working days in advance and in details. Consider all working days, days-off and vacations. Remember, resource management is as important as any other activity in a project. There is no insignificant detail in it.

Also, make sure all resources are allocated according to their abilities. Reallocate them if needed.

7. No attention to people management

Project scope, costs, deliverables, deadlines… too many managers stuck in them thus creating environment for other project pitfalls. They simply forget about people who actually do all the work. Proper team management leads to better communication and understanding within a project. And vice versa, lack of people management leads to wrong task fulfilment and missed deadlines.

Way to improve

Actually, this point is similar to the first one where communication was described. Speak to your colleagues, remind everyone how his or her role is important for successful project fulfilment without project management pitfalls. Hold meetings with team participants for everyone to get a clear picture, and for stakeholders to provide better project stakeholder management.

8. Inappropriate risk management

It may sound surprising to someone or even daunting, but risks will occur, no matter how perfectly everything looked like at the beginning. Risks are one of the pitfalls in project management that are highly likely to happen at any stage. But what a manager can do is to apply one of the 10 project management skills of every successful manager, foresee them and be prepared for them.

Ways to improve

Do your best and calculate as many risks as possible from the very beginning. Share your ideas with your team members, report them all results of your calculations and prepare them for each situation, even the worst one. The more they know about risks and ways how to conduct themselves, the better it is for the whole project.

9. Faked or not realistic deadlines

This is a point all about psychology. Bosses and managers usually set faked deadlines with almost unrealistic time limits that will be followed by real ones. Here is what they think: it is hard to meet a faked deadline, but my team members think that this is a real one what will make them to do their best to complete tasks. After that, realizing that there is still some time gap before a real one, they are definitely supposed to finish them in time.

Ways to improve

Give up the practice of setting faked deadlines. It is a slippery slope. Once colleagues notice that a manager adheres to the practice of setting faked deadlines, they may once and for all stop to believe a manager. It is a tricky project pitfall that every leader should avoid.

10. Not using or using inefficient project management tool

A project manager without a special tool is like a hunter without a gun. It is almost impossible to remember and manage everything, especially in multiple projects environment.

Therefore, the right choice of a tool is a crucial point that helps to forget about many tricky pitfalls. GanttPRO Gantt chart software allows managers and team members to keep project tracks, be aware of start and end dates of each task, effectively allocate resources and simply collaborate with team members or stakeholders.

Have you ever been in situations where described above pitfalls in project management ruined your plans? Probably, you have been in situation that was not described here? Please, share your comments with us!

3 Common M&A Pitfalls, and How to Avoid Them

Executive Summary

M&A deals that are made for the purpose of acquiring new technology can make or break a company. At worst, a disastrous deal leads to wasted effort and dollars, often in the millions or even billions. On the flip side, a strategic transaction can catapult a company into first-mover position, give a speed to market advantage over rivals, and potentially let a larger company run away with a new market. But good mergers aren’t easy to pull off. There are a host of things that lead to failure — financial losses, stock drops, lost market opportunities, fizzled dreams. Being prepared for all the possibilities, and knowing about the various snags that might arise, will increase the likelihood of a smooth and successful union.

M&A deals that are made for the purpose of acquiring new technology can make or break a company. At worst, a disastrous deal leads to wasted effort and dollars, often in the millions or even billions. On the flip side, a strategic transaction can catapult a company into first-mover position, give a speed to market advantage over rivals, and potentially let a larger company run away with a new market. Take Google’s purchase of YouTube, now a multibillion-dollar revenue stream that’s fueling the disruption of cable, or Facebook buying Instagram, which solidified its social media dominance.

But the M&A landscape is also littered with examples of failures, such as Microsoft’s attempt to buy its way into the mobile market by acquiring Nokia. And probably the most notable example — AOL’s ill-fated purchase of Time Warner during the dotcom bubble (or better phrased, Time Warner’s mistake in selling to AOL).

As a former M&A attorney, former Google executive, and a serial entrepreneur, I have experienced M&A from every point of view. Experience has taught me that the art of good M&A requires a combination of careful research, emotional intelligence, and attention to detail that might otherwise get overlooked; due diligence requires more than a scan through boxes of contracts and reviewing the balance sheet. Here are three tips for sidestepping some pitfalls that aren’t always obvious, but that could spoil an otherwise successful technology acquisition:

Make sure you’re buying the core underlying technology (and the full rights to it), not just the company licensing the technology.

In 2005, eBay spent $2.6 billion on Skype, which it hoped would increase sales on its platform by giving buyers and sellers an instant communications channel. When Skype failed to take off among eBay users, most people assumed that was the reason eBay put Skype for sale four years later (taking a $936 million write-down in the value). But there was a little known fact complicating the situation: The purchase didn’t include full ownership of Skype’s underlying technology. At the time, I was at Google, heading up Google Voice, and we were thinking about trying to buy Skype from eBay. We decided against it when we realized we would have to negotiate not only with eBay, but also Niklas Zennstrom, Skype’s founder, who maintained ownership of the core peer-to-peer networking technology. Eventually, eBay sold a big stake of Skype to a group of private investors and a few years later, Microsoft bought the company along with the intellectual property.

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Competing in the Future

When I was in M&A law, we spent the vast majority of our due diligence work on every deal checking to make sure the acquisition target had clean rights to the technology the acquiring company was trying to buy. The first and second year associates would get the task of reading through every contract the target company had entered…usually stacked in in banker’s boxes in some due diligence room. It was painful, but it helped ensure there were no legal limits on any underlying intellectual property.

Communicate with all shareholders, even those with a small stake.

When Yahoo was about to buy my first startup, Dialpad Communications, we met surprising resistance from an unlikely source. An investor, who had written off most of his stake in Dialpad many years earlier, thus indicating that the company was worth close to zero to him, suddenly had his own ideas. As the deal was about to close, I called him to say, “Great news! You’re about to make millions off of the investment you wrote off years ago. All you have to do is sign this paper.” I expected gratitude and cooperation, but apparently my lack of communication about the negotiation process was not appreciated, and the investor put a higher dollar value on his share. Looking back on it, I shouldn’t have expected champagne corks and flowers so soon. A deal isn’t over until the ink is dry.

First, every M&A deal throws curveballs, so anticipate and brace yourself for them. Second, people act in their own best interests — often at the last minute. Mitigate the consequences of that potentially irrational self-interest by having conversations early on. That way, you’ll buy yourself more time to negotiate tricky requests and help shareholders understand what they’re getting.

Don’t underestimate the value of chemistry and culture.

Sometimes companies are so blinded by the potential for technology synergies and market growth from a merger that they fail to take into account something obvious — the people. One of the most notorious examples of a post-M&A culture misfit is the 2005 merger of Kansas-based Sprint and Nextel. Conservative Sprint executives clashed with scrappy Nextel personnel. A Nextel managers’ meeting illustrated the dynamic perfectly: The Nextel CEO wore khakis and shouted “Stick it to Verizon!,” while his Sprint counterpart, wearing a suit, gave a PowerPoint presentation. Lack of chemistry affected the ability to effectively integrate in other ways and ultimately forced the Sprint CEO to resign.

My current company, Dialpad (I bought back the name after selling Dialpad Communications to Yahoo! in 2005), recently acquired TalkIQ, a leader in the artificial intelligence and machine learning, and our shared culture and values have been a key factor to the success of this deal. Months before the acquisition, we were working together as partners and during weekly engineering meetings we found the two teams naturally worked as one. This made sense, as TalkIQ’s CEO had worked side by side for years with my co-founder (now Dialpad’s vice president of engineering) to oversee the massive growth of Google AdWords, remaining close friends after they left Google to pursue other career opportunities. You can’t put too fine a point on how important shared chemistry and culture are.

Good mergers aren’t easy to pull off. There are a host of things that lead to failure — financial losses, stock drops, lost market opportunities, fizzled dreams. Being prepared for all the possibilities, and knowing about the various snags that might arise, will increase the likelihood of a smooth and successful union.

The primary trading pitfalls. How you can avoid them

Trading on the financial market is associated with high levels of emotional pressure put on traders. This is largely due to the specificities of the market, such as the financial risk, difficulties forecasting the future and so on. Therefore, there are an array of common pitfalls that many traders fall into, especially beginners who have just begun learning about trading on the financial markets.

Due to this gravity of this topic, we decided to dedicate an entire article to this alone. Further on we will cover the most widespread and inconspicuous psychological pitfalls in trading, as well as go into ways to combat them. Being aware of such vulnerabilities at times increases the likelihood that you will successfully make the journey from a beginner to a professional trader.

Psychological pitfalls in trading

When we asked some successful traders what the secret to trading was, we got a variety of answers. However, they all had one thing in common. Every expert exchange-trader of any kind made sure to emphasize the importance of psychological factors. And professionals agree that 90% of market success is based on how a trader relates to trading. They mean namely their mental state. The trading systems used, the indicators, the methods of managing capital and so on are all secondary. Therefore, we begin this article by considering the most wide-spread psychological pitfalls. For starters, we will list them, then go on to consider each of them individually.

• Paying too close attention to the chart and open trades.
• Holding on to losing trades too long in the hopes of market reversals.
• Fixing the profit at an inopportune time in the hopes that the trend continues.
• Trying to recoup lost funds to compensate for the loss of a deposit.
• Leaving the market too soon out of the fear of a profitable trend ending.
• Losing control and treating it like gambling, relying on luck rather than a trading system.

The points listed above have an effect on the trading process itself. The common cause all of this is the inability to keep emotions under control. When traders start to consider things logically and through reason, they accurately evaluate the situation.

However, human intuition is the leading advantage people have over robots. If this wasn’t the case, automated systems would have long replaced traders, as they are completely free of emotions and exclusively act in accordance with their algorithm.
That hasn’t happened, because the famous 20/80 formula is in play. Only 80% of your success is determined by your trading system, the remaining 20% is the intuition of the trader themself, the person (not a robot) trading on the financial market.

As always, the truth is somewhere in the middle. Although it can clearly be said that all experienced traders carefully control their emotions, at the same time they don’t ignore their intuition. If you base 80% of your trading decision on cold calculations and 20% of it on intuition, then you will fall within the range of norms. Conversely, is 80% is emotion and only 20% or less is market analysis conducted through your selected trading system, then you are no longer trading, you are gambling.

Closely monitoring open trades

This mistake is very common among beginners. It goes as follows. A trader opens a trading operation and is literally “glued” to the terminal. They follow every minor price fluctuation and worrying about even short-term price corrections in the “wrong” direction.

There is a general rule that traders should conduct their market analysis before placing trades, not after. Once a trade has been placed, in all honesty, you can close the terminal and go on with your life. This should have no effect on the operation’s results. After entering the market, closely following every slight price fluctuation will only destabilize your mental state.
The idea that this helps “control the situation” is an illusion. It is very easy to avoid this pitfall, there is no point excessively concentrating on the market as it won’t sway the final result.

That being said, there are several nuances. When trading with fixed (Buy/Sell) contracts, there is no point opening the trading terminal at all as many platforms won’t allow you to close trades prematurely. For example, on most platforms, you can’t close classic or turbo contracts prior to their expiration. That being said, you can when CFD trading. Contracts based on price difference run on the principle that, as do Forex trades. Therefore, if you trade on a specialized CFD platform, then you need to follow the market so as to fix the profit or limit the loss in time.

Retaining losing operations and closing trades early

To clarify, this is applicable only when trading with contracts that have open expirations, meaning that trades can be closed at any point (for example CFD or Forex). The essence of this pitfall hinges on the common feeling of intense fear of losing money. In the first case, the trader runs a losing trade too long. The market moved in the “wrong” direction, however, the trade remains open in the hopes that soon the trend will reverse and recover the losses.

The situation is reversed when the price is fixed too early. When a trade has been successfully placed, however, it is closed prior to the planned point in time, or when a certain amount of profit has accrued. The reason for this is again due to the trader monitoring the trading terminal too closely and, in a moment of fear, they become convinced that there will be a global market reversal, motivating them to close their order.
The way to combat this pitfall is also very simple. You need to clearly outline a plan in advance and strictly adhere to it. Losing operations should be closed either by a stop loss or manually as soon as the predetermined loss has been reached. The situation is reversed with profitable positions, although a trading stop mechanism is typically used, i.e. a flexible stop loss after the position becomes profitable. If the trading platform doesn’t provide automated stops, then it can be done manually. In the latter case, closely monitor the terminal, it isn’t a psychological pitfall when it is necessary for trading successfully.

Gambling and the scramble to win back funds

This more insidious psychological pitfall is the reason that the majority of beginners lose their deposits. The moment you start to leave trading to fate, rather than follow a system (regardless of if you’ve worked it out yourself or it is ready-made), you’ve gone down a direct and swift path to financial loss. Besides, you won’t gain the usual experience from losses that you get when you adhere to a trading system.

Losses are inevitable. “Only someone who does nothing will make no mistakes”. Absolutely every professional has gone through this to achieve success trading on the exchange. In the beginning, it is completely normal. It can be considered as the price of learning. The money could go to an official trading course or to the financial market. In essence, that’s it. In this one case so long as beginners increase their level of experience it is justified.
The most important thing is that the trading system is strictly followed. If the situation has unfolded, it is worth analyzing it. That being said, never in any case whatsoever try to recoup previously lost deposits by increasing your stake in trading investments. Here we would recommend several practical approaches, those being:

• it follows to concentrate on the trading results (+/-), not on the total profit generated;
• measure your profit and loss in percentages, not in any concrete currencies;
• don’t use the Martingale method (doubling investments following losing trades), the focus needs to be on producing a higher percentage of profitable operations than losing;
• it is helpful to set a limit on the total number of trades or losses/profits per trading day, once that point has been reached, immediately stop trading.

Beginners only have to look at the Forex PAMM account statistics to be convinced that losing deposits is a normal occurrence. There are many examples where professionals consistently experience 5-30% deposit loss and still, at the same time, generate a significant profit. This is why if you have a bad trading day, it is worth taking a break and leaving trading to another more profitable time.

That being said, it is recommended that beginners start out on a demo account either way, because in the initial stages, due to a lack of experience, losing money is practically a guarantee. If only because of their inability to properly take advantage of their trading terminal. Some of trading platforms, for example, offers an unlimited demo deposit, around 100 choice strategies, dozens of video courses and easy opportunities to effectively educate yourself. After you’ve achieved strong results on a demo account, you can switch over to a live account. The minimum deposit is only $10 dollars, meaning you don’t need to risk much.

Fatigue, stress, and frustration

Since we’ve gone through common psychological pitfalls in trading, we’ll move on to a more general topic, although no less significant. The problem of fatigue in trading. Trading on the exchange is an intellectual endeavor. The prolonged mental strain from such a high level of emotional stress can quickly lead to a so-called “burnout”.
Such a state is characterized by a general decline in liveliness. In particular, our abilities to do intellectual tasks suffer. It becomes difficult to analyze and make balanced decisions, both of which are necessary to trade successfully.

In the majority of cases, burning out is another common trading pitfall, which is very much better avoided. Therefore, it is important to follow your trading regime, don’t get unnecessarily worked up, and relax when you can. Stress is relatively normal for people, so long as it doesn’t become pathological. Burning out is a relatively serious threat to your regulatory system, even more, decapacitating than your ability to work.
Factors that contribute to frustration:

• becoming a workaholic – You can’t spend 100% of your free time trading, you need to leave time for other important parts of your life;
• chronic sleep deprivation – high levels of stress can lead to insomnia, this is one of the reasons that it is recommended to trade at night;
• a pessimistic outlook – we get what we expect, or rather, we subconsciously fulfill our own prophecies;
• excessively concentrating on past failures – the past should stay in the past, continuing to punish ourselves for past mistakes can won’t lead to anything good.

How traders keep themselves together

I doubt that the well-known advice to get at least 8 hours of sleep a day is news to anyone. It, of course, is true, so there is no point giving any further recommendations. Therefore, let’s jump to considering a question related to trading.

Our main practical advice. It is worth taking trading a bit more “lightly”, although doing so measured and intelligently. The secret to trading coldly and calmly is to psychologically prepare yourself in advance for the worst-case scenario.

In reality, it is a psychological trick to work through difficult emotions necessary for making key decisions. You will see for yourself. Once you start worrying less about possible losses, then these negative scenarios will happen less often than in the reverse situation. It has a common sense explanation, as a calm mind is more capable of generating more accurate forecasts.
Trading is not a game, it is a professional sphere of activity. It is completely realistic to achieve success with it, as a significant number of people know too well after years of earning profit from exchange trades. That being said, nothing worth having is easily obtained. It takes time and effort to learn any profession. If you act carefully and meticulously, then you will surely teach yourself to trade profitably with either minimal loss or completely free from it using a demo account.

“General Risk Warning: Binary options and cryptocurrency trading carry a high level of risk and can result in the loss of all your funds.”

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