Know these mistakes to stay away from them

Know these mistakes to stay away from them

The professionals are humankind like you. So how can you expect them to make no mistake? They would have and they will make mistake and it is natural. If you try to become a trader who doesn’t make mistakes, we would say it is impossible. You can never become. Even the professionals make mistake because that’s how it is. The market is uncertain so it is pretty hard to guess the market’s next move. Even the professionals don’t try to do it, they just get along with the way the market wants. They try to understand the market to the level best. Likewise, even a naïve trader should understand that it is impossible to not to make mistake. The Forex doesn’t stop anyone from entering the market. If you want to enter Forex you can do it. You just have to have a proper device, initial capital and an internet connection. Do not confuse low barriers for entry with ease, just because it has low barriers for entry doesn’t mean you are going to have a great time. There are countless mistakes made by traders which proves that the market isn’t easy. Nevertheless, we will mention a few mistakes that you must stay away from.

In order to identify your mistakes, you must follow a trading journal. Some of you might say digital journal is the best way to record things but in reality, the paper-based journal is thousand times better. When you start writing things in details, you are actually assessing your trade setup. This will filter out many false trades. Being a new trader, the thing will be a little bit boring to you but if you focus on the long-term market trend, you will be able to find the best trades. And a few decent winners will make you realize the importance of the paper-based journal. However, if you still want to use the digital journal it completely fine. But make sure your asses your past trade results during the weekend. If you don’t study your mistakes, becoming successful in Forex market will become extremely hard. Always try to think smart to become a profitable trader.

Not having the clear view on risk -reward ratio

This is the major mistake made by many traders. They don’t have the basic understanding of the risk-reward ratio and this can lead to failures. However, as naïve traders, you should know to handle this risk-reward ratio in a proper way. We advise using the metatrader 4 demo account as it is the popular choice. You can learn risk-reward ratio using this account as it would cost zero dollars. If you want to become a good trader your risk-reward ratio should be 60{07e6f45e06b6212b7758d6987e781210b71bc7c7e73296f3ecfd05a590ad5307} it proves that your winning trades are higher. But 60{07e6f45e06b6212b7758d6987e781210b71bc7c7e73296f3ecfd05a590ad5307} win rate is not possible for a naïve trader so what you should do is keep trying. Every expert would accept that practice is the best way to achieve success.

Don’t underrate stop loss

You do not know the value of stop loss. It shouldn’t be underrated. Every single trade should have a stop loss. Meaning you should be prepared for a stop loss. Most naïve traders tend to overlook this factor which is a serious issue. You shouldn’t do it because a stop loss is important for a successful trading journey. A stop loss helps to keep yourself away from the risks. When the price doesn’t act according to your anticipation you can easily make use of the stop loss. You must learn to place stop loss accurately.

Risk management is neglected

Is it possible to trade Forex if you neglect risk management? Obviously, you cannot. If you want to remain in the market for a long you should master risk management. This is one of the important concepts that every trader should consider. Through risk management, you can set limits on your losses so don’t neglect it.


Categories: Business

About Author