We have arrived in 2018, however, the FOREX trading is not an easy ball game today, it’s a kind of high leverage market either the trader loses a whole lot of money or gains the huge deal from the lot. There are a 5 common mistakes the day traders makes an attempt to win the FOREX game without knowing the basic rules.
In this article, we highlight you the 5 Common mistakes that day traders make in an attempt to capture the entire game. The traders often end up resulting in lower returns. Let’s study those six tips that can be avoided with knowledge, discipline or an alternative approach. Let’s see some of the trading strategies that will help for the part-time FOREX Traders
Down Average: The FOREX traders often fail while doing the trade they either tend to do that begins with the trading, however, end up losing the entire money. There is a huge problem in averaging down. While the major problem is holding the position in a hope it will be better than others.
It may either work, but a majority of the times averaging down lead to losses which are sometimes called as a margin trading. This trend helps the trader to sustain in a market. The trader prefers the margin trading because it helps them to enjoy liquidity and can move the position at any direction. The major issue faced by the day traders they try to work in a short time frame.
Trading based on Market News: Majority of times the news either go in the direction which is not known by anyone nor predicted by any of the top analysts. A FOREX Trader is sometimes so confident that they trade with the announcement of the market news. This is a time where there is an adrenaline rush of emotions and confidence to make huge profits in trading deals. But the fact, the market reacts quite differently. There are many times, where there is a prediction by some market analyst which is probably illogical or doesn’t make any sense at all, but still, the traders follow this suit.
It is a fact when the volatility surge there is a sense of dis-coordination in the market. Hence, you can see there is a major trend that emerges in the market. While for any other reason, there is no sense of belief which can either turn into huge losses.
The Expectations that is quite unreal:
The expectations are quite unreal or the traders sometimes often get confused because of the set unreal expectations. The trading expectations leave them to impose some of the desires and realistic direction. Sometimes, the market never seems to care about the emotional sentiments of traders. This can either be even worst of all the times, there is a trend cycle which is isolating your every move. Majority of the people believes that it either relates to frustration and judgment in the error.
When you rely on something unreal you seem to lose your inner confidence in yourself that shows a majority of the liquidity concerns.
4. Excessive risking:
Sometimes risking doesn’t mean everything, it can either be on the traders who either risk large amounts i.e sometimes it’s like risking lots of capital at one time. While the common rule says that it can either be the trading risk at any one point of single trades. Those who are professional traders are the one who risk large amount of capital. Sometimes the day traders need to put an extra attention on certain area.
You need to understand 1 basic rule that never risk your total capital of more than 2% which is equivalent to around 2% of the profit takeover.
For instance, a trader who starts trading with $10,000 Live account has to analyse and trading the capital of around $200 which comes to around 2% in a single trading session. A trader needs to have atleast $100 profit everyday to keep them going.
· #Mistake 5:
5. Choose Perfect Leverage:
The major purpose of this method is that there is no day or single trading. A FOREX traders needs to self analyse the risk and take trading decision in his ball court. There is always risk adoption with a single trading system. While they need to analyse much leverage they need to set leverage in every single trading decision.
If a trader is not sure of how the market goes. i.e in which direction then they need to sort the day period of more than 30-Days which can either be the pull back or something else. The traders need to have a pull-back strategy or they need to choose a leverage something like 50%. This will help them to save the money rom the extra losses.
6. Not following a proper Plan:
There is a minimum set of risk one needs to follow. The biggest mistake FOREX Traders is they try to just go with the flow hence 90% traders are quite average while those who are 10% are now multi-millionaires. Guess what makes them successful?
They follow one or we can say the perfect trading strategy. Most of the times it is over 30-Days time line and choose a perfect trading strategy. The traders always need to have a plan B (if Plan A fails) I,e they need to follow win back strategy.
Traders need to accept the fact that they are the market providers, while the day trader needs to explore the option of becoming more volatile in nature. The trading strategies or will be used only in the day works much better. Some people are quieter and have better trading strategies and focus on the things that are better. The traders need to avoid these 6 grave FOREX trading mistakes at any cost. In case, If you have certain trading pitfalls or any other need to discuss. Kindly be in touch with our analyst at (+1)315-277-2288 or we have developed a separate automated EA Trading system that gives a turnover profit of 2% to 5% on every trade.