Trade In The Red - How To Avoid This?
It is always more pleasant to learn from other people 's mistakes than from your own. In this article, I will provide a list of reasons why traders lose their money while trading on Forex
It is always more pleasant to learn from other people 's mistakes than from your own. In this article, I will provide a list of reasons why traders lose their money while trading on Forex. I have compiled a list based on personal long-term experience of communication with traders of different levels - from beginners to professionals.
Traders who trade without a clearly crafted trading strategy lose their money the fastest. Non-compliance with risks, departure from the rules of trade during any stressful situations - all this leads to the fact that a person, under the influence of emotions, fear of losing money - really loses them.
Monitoring the news is the right thing to do. But it is important not to throw at each news, but to analyze whether the assessment of the news has already occurred by the market itself.
Many traders, having closed several successful profitable deals, begin to feel 100% more confident, and their trade becomes aggressive. Based only on guesses and intuition, they enter the deal, using most or even all of their deposit at once.
Beginners often do not know how to determine the level of risk and do not expose stop loss.
Some traders trade exclusively in one direction, not knowing that the situation in the market is constantly changing.
From a lack of experience, a person is materially or emotionally attached to a certain deal, and cannot accept that it has not made a profit.
Frequent trade is not just a mistake for beginners. But exceeding the trading regime, even if you feel that the "case has gone" - is fraught with losses due to banal brain fatigue and inability to adequately respond to changes on the chart.
Linking separately to fundamental or technical analysis can cause a lot of money to be lost. Forex market analysis is complex, so several types of analysis need to be used for the most accurate result.
Guided by heart in making a decision is permissible in personal life, but not in the currency market. Emotions during trading need to be turned off using only a cold head and a trading strategy.
Lack of discipline, inability to follow the plan - features of character of the person who will definitely lose money on Forex. If you are such a person - first you will be engaged in self-discipline, you will learn organization, without which it is impossible to survive on the currency market without losses.
If a trader takes a big risk for a deal with little potential - 99% probability that he will lose money.
Misunderstanding of how the range market differs from the trend market is one of the most common errors in trading.
Trade against trend is a separate topic that requires separate attention. But this strategy is definitely not for beginners - too serious risks and a lot of nuances, which require a lot of experience.
To follow the advice of the experienced, whose opinion is based solely on the level of intuition - foolish, but to dismiss more experienced traders - is not necessary. Blindly do all the things they say - you can 't, you have to think with your head first and analyze every word you say. But it 's always a reason to make sure you 're doing the right thing. You must remember that there will always be someone who knows better than you. Which means you can 't stop development.
One of the mistakes of beginners on Forex is the assessment of the state of the market without statistics. History is important, because it can help avoid losses.