Lack of experience and the number of mistakes that often do make beginner traders are often difficult to profit consistently. Worse yet, often beginner traders do not understand what is wrong. So the loss can occur over and over again because of the same cause. However, if you can recognize and then avoid it, it means increased trading quality.
Well, here are some fatal mistakes that are often done by beginner traders, and you should warn not to fall.
Trading without a Trading Plan
Beginner traders often do not have a clear trading plan, only instinct-based. Look at the charts, then buy or sell with just an opinion, “It seems to be going up” or “After this should go down”. In fact, such is not trading, but a waste of money!
More experienced forex traders have a clear trading plan before buying or selling. What kind of trading plan? The trading plan contains the system used to filter opportunities in the market. What to do if lost. When to take profit or close a trading position. These things must be determined before opening any trading position, anytime. Follow fxtrade777 to know the development of economic news.
Trading without Stop Loss
Stop Loss (SL) is an automatic loss termination that can be installed on the f1pro market platform when opening trading positions and thereafter. It is useful to prevent losses that are too large. Installing the SL will help traders cope with times when the market suddenly moves against the prediction. SL feature will make traders easier. When enabled trader does not need to wait in front of the screen to monitor.
Trading too Often (Overtrading)
Beginner traders sometimes get too excited up to a dozen or two dozen trading days at a time. You should not open too many trading positions at the same time. Correlations between currencies can make some of them conflict with each other. So any loss will definitely happen. Limit only in amounts you can count with one hand only. That way, surveillance can be lighter.
Trading with Leverage too High
Leverage helps beginner traders with the capital of coins to trade as if already a millionaire. Instead of capital out of 100 dollars and trading using 1: 100 leverage, better out 10 dollar capital and trading using 1: 1000 leverage. Yet the power of buying and sell it the same.
That is a big mistake. Although there is leverage, the “strength” of the trader actually remains at the original capital. Why? because there is a margin requirement. If the margin is not enough, then the position will be closed by the broker even in a loss condition. Meanwhile, if the margin is sufficient, then trading is more convenient. This margin itself comes from your capital.
Got Target too High
Want 100% profit in one month. Or must profit 100 pips in a day. These targets may be realistic for a particular person, but not for beginner traders in general, especially when the capital is tight.
There are two things that every trader needs to understand. First, the loss is sure to happen, even professional traders will still experience it. The key to success in trading is to minimize loss. Not a loss at all. Secondly, none of the perfect indicators would be right. As we do not know whether tomorrow we die or not. Similarly, traders, cannot guess the future with certainty. In forex trading, the trading system with 60% Win Rate alone can be said good because it has profit. Remember, the most important is not any loss, but minimize loss.