Five most dangerous mistake of the novice traders
Forex trading is one of the most lucrative professions in today’s world. The number of retail traders in the online trading industry is rising at an exponential rate. People think this is the perfect place to make tons of money without doing any hard work. In reality though, more than 90 % of the traders are losing money. Without understanding the complex nature of the Forex market, it is really hard to establish yourself in the professional trading community. In today’s article, we will discuss the top five mistakes the novice traders commit in the early stage of their trading career.
Overtrading the market
Overtrading is one of the key reason for losing a huge amount of money. The new investors always think by placing more trades they can earn more money. You don’t have to trade 24 hours a day to secure your financial freedom. In fact, the pro-Singaporean traders hardly open more than one trades in a single day. Stop overtrading the market at any cost. This is going to kill your trading career within a time. Try to focus on proper risk management policy and trade the high-quality trade setups. Ignore the signals in the lower time frame as it never helps in the long run.
Ignoring the fundamental news
Fundamental news is the major price driving catalyst in the Forex market. Those who are new to this market tend to use the technical data only. But technical factors will never give you a clear picture of the market. You need to use the fundamental data and place your trade with managed risk. If you get confused with the fundamental data, take your time and seek help from the experts. Without understanding the basics of fundamental analysis, you should never trade the real market.
Using EAs and bots
This is where most of the intermediate trades make mistake. Trading CFDs is an art and you can’t make a consistent profit by using EAs and bots. Take your time and try to develop a manual trading strategy. People often things automated trading software is the best way to secure financial freedom. If this is true no one in this world would have lost money in the Forex market. However, you can use EAs and bots to make sure you are not placing trades without manual analysis. Consider them as your tools and try to fine-tune your trading strategy.
Ignoring the market trend
Do you know why the pro-Singaporean traders are so good at the Forex trading profession? They are always placing trades with the market trend. The trend is your friend and the moment you stop trading with the trend is the very moment you start losing a huge amount of money. You have to understand the nature of the Forex market before you consider it as your full-time profession. Stop thinking about short-term profit taking the opportunity. Those who trade the lower time frame data should never place a trade with a big lot. If the possible focus on the higher time frame as it will always give you a bigger picture of the market trend. Try to eliminate your risk exposure in every possible way.
Overconfidence is a killer in the investment business. No one is sure about the price movement of a certain asset in the financial industry. So if you start taking huge risks because of your confident nature, you are going to have a tough time in retail trading business. As a new trader, try to understand how this market works. If necessary enroll yourself in a paid training program. Once you start understanding the nature of the market, trade the market with logic. Always think about the worst case scenario as no one is sure about the market movement. Confidence is good but too much confidence is going to ruin your trading career within a short period of time.