So you want to be a successful trader？ You will need to avoid making several basic blunders that traders often make. You will make errors as you begin to trade, but the traders who succeed are the ones that learn from their mistakes and find out how to avoid repeating them again and again. In this session, I'll go through the most frequent errors traders make and provide some easy answers to them. It's now up to you as a trader to learn from and prevent these mistakes as you continue to study and trade the market.Overtrading and being involved in too many trades at once.
This mistake is made by 100% of beginners and 90% of the rest of the population. Furthermore, 90 percent of traders lose money in the long run because they trade too much. You're trading too much if you're involved in many deals at the same time. Never make more than one transaction at a time.
Most people can't resist the need to trade, so they make up reasons to do so or create bogus trading signals. You'll never make consistent money trading markets until you learn to be disciplined and stop overtrading.
Changing your perspective about trading and “making money trading” may be the most straightforward way to stop overtrading. Rather than seeking any excuse to get into the market, you'll look for reasons why trading may not be a good idea instead of jumping right in (like most traders do).
Spending an excessive amount of time pondering trading and studying charts Overtrading is nothing more than obsessively pondering one's trading decisions. Some traders spend too much time looking at the charts, especially when there are no obvious price action signs to trade. As a result, they wind up entering a trade that they would not normally do if they were following their trading plan.
Is it any wonder that you're over-trading and losing money when you're always thinking about markets and your trading？
Scheduled time away from the charts is essential to any trading strategy. It's just “part of the process” if you stay with your trading strategy and take frequent breaks from the market. You are responsible if you depart from the approach and lose money as a consequence. This is why most traders lose money: they can't stick with a strategy for an extended length of time because they lack discipline and self-control (consistently).
Attempting to make trading decisions based on short-term charts
Day trading is a novice's mistake. People often hear the term “day trading” before understanding more. This puts them on the wrong path right away, leading to over-trading, gambling, and trading addiction.
Lower time period charts have less importance. Because longer time periods represent more data, they have greater “weight” than shorter ones. Daily chart bars are more important than 1-minute chart bars. Higher time spans need more patience, but they deliver more consistent signals with less stress. That seems like a good deal to me. Daily charts allow you to make a trade and keep it open for 24 hours or more. How to live a trading lifestyle and trade like a nomad.
Trading with Real Money Before Practicing on a Demo Account
This deadly mistake is made by new traders all the time. Trading with real money before trying out a demo account is a bad idea. Traders don't understand how the account works, so they make stupid mistakes like risking more than they planned or failing to set a stop loss appropriately, among other things. They are losing money.
You don't know whether your trading strategy is effective since you haven't tested it on a sample account (in actual market conditions). It seems odd that someone would risk their genuine, hard-earned money in the market with no demo practice, but many gamblers in Las Vegas do just that, so it's just another version of that.
Your task as a competent and profitable trader is to TEST your approach, as well as your trading skills, using a trusted demo trading platform before you begin trading live! A demo account is a great way to gain a feel for the market and your trading strategy without risking real money.
Getting Sucked Into News Distractions' “Black Hole”
If you aren't careful, you may fall into the “black hole” of news distractions and lose all of your money.
Traders “look for reasons” why their trade should work, and as we all know, anything can be found online, including arguments for and against trading. A lot of traders use the internet to “study” economic and trade news in an attempt to make predictions about what will happen next. That's how they make their decisions in the market. Dangerous! It's risky because the “big guys” have already moved on to what they expect to happen before the news breaks; this is a dangerous situation.
It's expected that the price would rise and then fall in response to the news, causing the market to whipsaw. This makes trading difficult and causes uneducated traders to lose money. This is why news trading is dangerous.
Trading price movement rather than news reduces misunderstanding. As previously said, price action on the chart reflects news and everything that affects a market. You can trade the news without studying or reading it after you learn to comprehend and trade price movement.
Ignorance of the Fact That Every Trade Has a Random Expectation
One important trading thinking error that most traders make is failing to see that every single transaction has about an equal chance of concluding in a loss or a gain. Having said that, this does not rule out the possibility of developing a plan that has a high probability of success. There is a complication with trading in that you can never be sure whether trades will be profitable or unsuccessful based on a small sample size since the results are entirely dependent on chance. If you forecast that your approach will win 60% of the time, you may anticipate that percentage to emerge throughout a large enough sample set.
To compare, think of it as flipping a coin. You expect to receive heads 50% of the time and tails 50% of the time, but within that 50% range, you may get say 10 consecutive heads, which would be baffling if you didn't understand you had to flip the coin a lot of times to get 50% heads.
Exchanging is the same! In a sample size of 100 trades, you may lose 10 consecutive transactions, but after those 100 deals, you may still win 60% of the time. The ramifications are enormous. If you don't stick to your trading plan and stay disciplined even during a losing streak, you'll stress out and perhaps over-trade, blowing out your account!
Remember that anyone's contract means almost nothing! It is the result of a large number of transactions that will show you if your edge and trading expertise are profitable. This also suggests that you must limit your risk to a level that allows you to run a large enough sample size to see your advantage play out!
Feeling of Desperation or Urgency to Trade
During trading or in negotiations, many traders feel “urgency” or “desperation.” This is caused by putting all of your “eggs” in one basket. Trading is risky and difficult since it requires mental strength that many people lack or are unable to gain.
Trading cannot be your “Plan A,” as it were. Even if you are excellent at trading and begin to generate consistent profits, you should have a side job and not put “all” of your money at risk in the markets. You might use Vanguard funds to make long-term investments in the stock market or a Roth IRA. If you put all of your eggs in one basket, you will place too much pressure on yourself to succeed.
Too much pressure to make money in trading will result in failure. You trade effectively when you remain calm and collected and don't care if your transactions win or lose. You've signed your “market death certificate” when you dedicate too much emotional and mental energy to a transaction or “trading” in general.
Too much waffling, not trusting your decisions, and sticking to them
When you initiate a trade, you must stick with it until the price action substantially changes in the same time frame. Please read that last phrase ten times over since it is critical to your trading career. Traders examine the market, find a trade signal, set it up, and place it, then panic an hour later because the price has moved against them and a “negative” sign appears next to their open trade profit. If you didn't already know, this is NORMAL. You'll have terrible transactions and losses, but if you worry every time, your account will be wiped out.
This is related to the previous statement about trade unpredictability. It is ridiculous to place too much emphasis on any one transaction since it is the whole sequence of trading outcomes that matters, not any single transaction. To trade profitably and without stress, you must let transactions play out for the market to 'think.' To put it another way, LEAVE THE PROCESS ALONE.
Too much emphasis on “money” and “reward” and not enough on the process
As I said before, let the PROCESS TO TAKE OVER. Traders focus too much on money and rewards and not enough on what matters: strategy, trading it well, sticking to it, risk management, position size, establishing, forgetting, and so on. You don't need to be concerned with incentives and “profits” since these are only symptoms of smart trading and thinking. They will not appear because you are concerned.
Interfering with Trades After They've Died (set and forget!)
Do you want to fumble your transactions and end up shooting yourself in the foot？ I'll demonstrate how. Begin playing with transactions after inputting them. Interfering in transactions after they have been entered is a common mistake made by traders.
It is advisable to do nothing after completing a transaction 90% of the time. Most traders, especially amateurs, tamper with their transactions, causing them to fail and costing them money.
To generate long-term profits in the markets, you must avoid the temptation to tamper with your transactions after they have expired.
Chasing a Signal You Missed – Entering Late and at a High Cost
You saw a trade setup you liked but didn't participate in for a variety of reasons. Later, you examined the charts and saw the price swing in your favor without your intervention. Frustrating. You don't want to jump into an industry that has already taken off. Wait for the next opportunity and remember that the market will be there tomorrow. Don't rush into a transaction or join a missed deal since this is rash thinking that will lose you money.
Not establishing a per-trade risk allowance
Do you realize how much money you may lose on each trade？ Is it a risk you're willing to take to get a good night's sleep？ Make some adjustments if this isn't the case.
If you're a trader, you probably don't spend any time figuring out how much money you're willing to lose on each deal, much less how much money you can lose on any particular contract. For those who have not done this, you should immediately cease trading until you do so.
WikiFX Introduction
All of the errors stated above may be avoided by utilizing just one piece of software, the WikiFX App. The WikiFX App provides traders with several capabilities that are not available on other sites. The WikiFX App search box, like Google, is your best buddy and will provide results if used. The WikiFX App can assist first-time traders in determining where to invest. On the other hand, it also provides technology like expert advisors and VPS to make your trading environment quicker and more lucrative. VPS enhances the trading environment in many ways, even if you live in a region with poor internet access. VPS can handle your everyday trading connections. While an Expert Advisor will help the trader to when to put trading positions. Visit WikiFX's official website (www.wikifx.com) to traverse the applications on your own and learn how useful it can be as a trustworthy inquiry partner on your forex trading trip. To access information on the move, the WikiFX App is now available for smartphones. Simply download it for free from the App Store or Google Play.
Conclusion
When you first start trading, you will make mistakes. Winners learn from their mistakes, whereas losers do not. Those who make a lot of money in the markets are not those who never make mistakes and trade “perfectly,” but rather those who learn from them and avoid them. It's easy to keep making the same trading mistakes until your money is gone. You should stay away from it.
I can help you with my blog lessons, professional trading classes, and members area, but it's up to YOU to put what you've learned into practice properly and consistently. I can't conduct your trading or phone you every day to tell you what to do. My classes are the next best thing since they include all of my knowledge and experience. My daily market remarks and email hotline provide market guidance on a daily basis. I've done all I can to help you with your trade; now you must decide if you have the discipline, tenacity, and drive to see it through.
