Some Common Mistakes of Novice Traders

Some Common Mistakes of Novice Traders

Feb 25 • Forex Trading Articles • 692 Views • Comments Off on Some Common Mistakes of Novice Traders

You try to trade as much as possible, always sit in front of the trading platform and try to catch the slightest price changes. This leads to the fact that you begin to perform chaotic actions that lead to negative results. This happens due to a large number of hasty transactions and complete non-compliance with money management.

How to avoid it?

Remember that the financial market is where you need to do quality work. Here, your results do not depend on the amount of time spent, but on what kind of trades you have concluded, how many of them there were, and the trading result for the month. If you cannot control your emotions, study the trading robots topic. It may well turn out like a better option. The software algorithm will work even when you are not near the computer.

You are trying to trade all assets and indicators in a row, indiscriminately, trying to become an expert in everything.

In pursuit of new material, you do not have time to assimilate the old one and continuously miss successful movements in the market according to the already studied signals.

How to avoid it?

To get the first results, traders usually start small and then build up their trading system’s complexity.

For example, you can start by examining one asset and those factors that affect its price. Admirers of technical analysis may like a combination of several indicators, the signals of which look clear and logical for them.

It is recommended that beginners in trading first try their hand at a demo account. A consistent approach will help you keep an eye on the instruments that best reflect your trading style.

The trader opens a trade and holds it even though the market is persistently going in the other direction.

What it leads to often in such situations, traders begin to suspect some “malicious intent” (“the market is always against me”). This tactic of deviating from prudent risk management jeopardizes trading success.

How to avoid it?

It should be accepted that this behavior is a gross violation of risk management. Smart risk management involves adhering to the original plan and dealing with unnecessary emotions.

Ignoring learning

It leads to a trader’s belief that he already knows everything, forgetting that the financial market is a complex, living structure that is constantly changing and requires more and more new knowledge. In the long run, the market does not forgive either the lack of theory or overconfidence in practice, quickly putting things in order.

How to avoid it?

Keep your finger on the pulse of the markets. Study new online courses and teaching methods. Deepen your practical skills and be open to different views on the situation through communication with like-minded people.

Ignoring money and risk management

What it leads to after each unsuccessful transaction, the trader, although he realizes that he is wrong, continues to look for the reasons for his failure from the outside.

How to avoid it? Invest a reasonable percentage of the account balance in a trade. Experienced traders often open 5-10% deals. Try to follow this rule and evaluate its effectiveness.

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