Human makes mistakes and it is in there nature. No matter how old and experienced you get, you will still make mistakes in Forex market. There is a chance that you can stop those from your early experience. But, you will still make new ones. In professions people also make mistakes. But it becomes very critical to surviving when mistakes are attempted by a job holder. In the case of trading business, traders also make mistakes. The ones we are going to discuss in this article are really vicious for a trading career. Read through the whole article to understand what these mistakes in trading are and how they affect the efficiency of a trader. We will also try to find out dome cure for these mistakes in this article. So, stay tuned with us and try to understand properly.
Micro-management of work
What is micro-management in trading? Say you are a newbie in this business. You have just started for a month or a few days. But you did not have any luck with your trades. Meaning that you haven’t been able to make any profit from your trades. So, you are thinking that there is some lacking in your effort. You are trying enough for a better execution of your trades. As a result, you will start managing everything from the core level. This is called micromanaging.
Honestly, trading is a really simple work. You have to act simply and make decisions with a cool mind. Over-complication will distract your brain from processing properly. In fact, you will see yourself being anti-productive. So, you should be avoiding this kind of technique in Forex trading. Just maintain those which need for a better execution of your trades.
Taking too much risk
Taking too much risk is very common in CFD trading profession. Since the majority of the brokers are offering high leverage trading accounts, the retail traders often forget the random outcome of each trade. After losing a few trades they become emotionally frustrated and try to recover from their loss. Emotions should have no impact on your trading career. If you listen to your emotions, it’s better not to trade the market. Always remember more than 90% of the traders are losing money since they don’t have any proper control over their emotions. Never risk too much in any trade even though you are extremely convinced about your trade setups.
Frequent trading policy
Almost all the mistakes in this article are related to the novice traders. Because traders make the most mistakes when they are a newbie. It’s because they are properly educated about this business and does not know too well. So, it is natural for them to make mistakes. A common one from them is overtrading or too frequent trading. When a trader thinks that by increasing the number of trades he or she can manage to execute good trades, they will take this step to improve their outcome. As a result, traders will increase the number simultaneous trading. But the end result is their trades makes them more losses than before they were overtrading. So, you will need to avoid this mistake. This is the most common reason for the fall of novice traders.
Improper risk management
If you want to trade and make money, you will need some investment to start with. It is the capital that will help you with buying and selling trades. When you close your trades with a loss, you will be losing your capital. But, if you can manage to close your trade with profit, you will make more money. But, traders think that they will be able to make more profit if they increase their investment. But there is no need for that because you can use leverage to trade for more than what you have in your account and your capital will have less risk. So keep it in mind while you are trading.