Are you a trader who recently had a failed trading? If you are one then you should know that it is high time that you checked if there is a hole in your trading method. Now you might say that you have all the skills and technical help to support you in your trading. You had enough capital and a good broker, to begin with. Then where do you lack? We would say it is in the methods.
Getting winning deals in trading is all about the successful application of trading methodology. If there remains some lacking or if you are not careful while trading, you can potentially lose winning trades. These trades will not only cause you monetary loss but it can also be the reason behind your being confiscated.
Since trading is pretty easy once you understand it, many traders think that most of the traders here are benefited. But it is not exactly true. Though many people manage to earn profits by investing in trading markets, the number of investors losing capital is not less either. Even due to negligence, a successful trader can fall at the pit overnight.
In trading, being the most resourceful or the smartest is not going to help you. Traders are often misguided about the factors that help a trader win trades. If you remain a bit cautious about these factors, the percentage of losing money decreases promisingly.
So today we will be talking about some errors that you may be doing and might be the reason behind your failure.
Not following a trading plan
A trading plan is a must-have for all traders. A well-engineered plan helps to organize all the works systematically. Trading without a plan can lead to messier and unsatisfying results.
Not doing your homework
A trader needs to have a good command of the market situation and good research of trading history. Without a thorough market analysis, it is not possible to understand the market clearly which may lead to a trading catastrophe. To trade Forex online, you must use strategic steps or else get ready to lose like majority of the traders.
Don’t trade too big
Many traders make the mistake to trade too big. Now, trading too big is often dangerous because the bigger the trade, the bigger is the risk. So, many traders cannot properly execute the trade and thus face a big amount of loss which can lead to a trader being emotionally vulnerable.
Not following trading discipline
A trader needs to maintain various disciplines to continue trading. A disciplined trader enjoys the profits he earned following a disciplined system. Without these rules, the traders face various problems.
For example, trading within the trading hours regularly is an example of trading discipline. If any trader fails to do so, he might face difficulties while trading.
Your assumptions may be wrong
Once you have some experience of winning trades in this field, the first thing you shouldn’t do is to think that all the decisions you take are correct. If you are more indulged in thinking that your trading method is completely right, you may be doing something very bad for your career. It may lead you to take actions ruthlessly without any prior thinking.
Not using a stop loss
The Stop-loss level should be fixed before purchasing any stock and it should be applied right after you buy them. Setting a stop loss helps you to reduce the rate of loss by closing the trade at a certain level. Not using a stop loss point, can even turn small losses into big losses which are highly risky for your trade.
Not using an accurate trendline
Trendlines are the greatest friends of people when it comes to trading. A trendline shows the movement of a trend and thus helps the traders to speculate the market. But, a trendline is not of much use if it is not drawn accurately. A faulty trendline often doesn’t fit the market as well.
So, if you think that you doing some of the above things then you need to be careful to refrain from doing those in your upcoming trades.