Forex trading gives us an enormous opportunity of making a smart career. It can help you to earn money more than you can imagine. But for that, you have to understand the market. Another important thing is that to earn money from this market you just need to invest. Normally, you will lose some money when you are trading in the Forex market. As a human being, it is quite natural to make mistakes. And making any mistakes in this market will increase your risk exposure.
Making mistakes is good if you can learn from them and do not repeat those mistakes. So as a new trader, try to know about the common mistake that day traders make. It will make your life easier. In the following article, we are going to describe few common mistakes and we will also mention how you can avoid that problem.
Not following stop-loss rules
The Forex market is the most volatile. Predicting the price movement is harder than stopping a bullet that is just triggered. So it is quite usual that the market can go against you no matter how good is your analyzing skill. At times, the novice traders get biased that the market will go in favor of them soon and by thinking like this they don’t close the trade. As a result, they face more losses, and even in some cases, they blow the whole trading capital.
On the other hand, sometimes the market becomes so volatile that it makes big moves in just a blink of an eye. To deal with such market movement, you must trade with high-end brokers. Feel free to explore the advanced features of Saxo as it will help you to choose a reliable broker at trading. By trading the market with a regulated broker, you can fix many common problems.
We always encourage you to invest a certain amount of money that you can lose. After investing the money, when you open a position you just need to give a stop-loss order to limit the risk. But new traders do not follow that rule and blow their account. So never keep a trade open without a stop loss because it helps you to keep your account alive.
The trend is considered as the friend of the trader but a trader must ensure that the trend that they are analyzing is strong. The market often makes a false trend and new traders often consider retracement as a new trend. As a result, most of the novice traders end up taking the trades against the existing trend. To avoid this type of scenario, you just need to take your time to identify fake and real trends.
Making early decision
As we said Forex is the most volatile market in the world. If you are smart enough and have experience in trading, you will find trades every minute. But it is not clever to try to open every single position that you found in the market rather you just need to find the best ones. Because your account might not handle more than 2 or 4 positions at a time due to your trading balance. Let’s say your account can handle 3 positions with a lot size of 0.5 according to your trading balance and risk management rules. After a few hours, you found a signal and you are convinced that you can earn more than those 3 trades. At such a moment, either you have to close a position or having to skip that opportunity. So before taking a trading decision take your time to find out which one will be more profitable for you.
These are the common mistakes of Forex traders and we always try our best to make a trader’s life easier. So we hope this article will be much help for you. If you are doing this type of mistake, try to avoid them by using the techniques mentioned in this article.