The main mistakes of novice traders - what not to do?
Barry Copeland
22 / June / 21
Visitors: 759
Every day more and more people, willing to earn, come to the currency market. But, unfortunately, few people initially understand that it is impossible to make money on Forex market without experience and basic knowledge. Before the time comes when the profit will flow like a river and a trader will be successful, it is necessary to make an effort to master the theory and details of the currency market. As the statistics shows, new traders constantly make the same mistakes, stepping on the same rake, as their predecessors.
The most widespread and the most important mistake is the lack of knowledge, which is necessary for successful trading. When newcomers enter the currency market, they immediately try to get into the market, because they think that a book they have read or courses they have taken are the guarantee of success. This notion is wrong, even if a trader reads all the existing books, it does not guarantee that he/she will immediately start trading successfully. The fundamental thing is to study all the details of the market, work closely with the more experienced traders, demo-trading under their guidance. Only after that independent, cautious trading on the real market is possible.
The next significant mistake is overconfidence in own forces and hurry. As the statistics shows practically all traders gain some profit within the first months after which they lose all their capital. What is the reason? The main reason is that the initial success is encouraging. The trader is in euphoria and, as a result, begins to break all the rules. It should be remembered that all the rules remain unchanged, and they should be strictly adhered to.
The next mistake traders often make is intraday trading. With no experience in this type of trading, newbies come in and want to beat the market. But it should be remembered that trading intraday is quite difficult and it's not available to everyone. First of all, it is connected with rapid decision making, which depends on the trader's experience as well. Beginners can be advised to trade on higher timeframes first, so as to gain experience and learn to understand the market with its peculiarities.
Also, beginners often trade against the trend, which leads to the rapid loss of deposit. It is recommended to stick to the crowd and trade with everyone else. If market entry is missed, you should not jump in the "departing train", it is better to wait for the next entry. Also, many people rely too much on various indicators. But there is one "but" - they can show the possible development of events and only that. A trader should make a decision on market entering relying on his own analysis first of all.
Absence of trading plan for the day also leads to losses. That's why it's recommended to make thorough analysis and consideration of all possible options of the coming trading day before trading.
