Forex trading is such a lucrative business that every single day the number of new traders are increasing at an exponential rate. Most of the novice traders consider forex trading as an easy job and started their trading career without having any prior knowledge about the financial industry. But trading the financial instrument requires pin perfect execution of the trading plan and perfect understanding of the dynamics of the forex market. If we look at the number of successful traders in the financial industry then we will see that very few people are making money by trading the financial instrument and most of them are losing money or struggling hard. Forex trading is just like running a business. You need to have a valid trading plan and you need an approach in the market with a specific target. If you trade the market without having any valid trading strategy then chances are very high that you will lose money in this industry. All the professional traders in the forex trading world trade different assets in the market with perfect trading strategy and they remain strictly discipline though out their trading career. In this article, we will discuss some of the most common mistakes that every new trader makes in their early part of their trading a career.
Overtrading: Those who are trading the financial instrument for the very first of their life trade too often in the market. To be honest they simply open their online trading platform and execute their trade in the market without any proper analysis or reason. They simply think that by trading more they will generate more profit in the market. But in reality the more you will trade the higher chances you will have in case of losing money. Even there are some traders who trade the different assets in the market by taking other people suggestion. Forex market is such dynamic market that every single day it’s changing its pattern. Even the professional traders in the financial world often find it difficult to trade the live assets in the market. They always focus on high-quality trade execution and they use the advanced features of their trading platform to take high-quality trades. As a novice trader, you should only focus on high-quality trade execution and never try to trade the smaller time frame in the market. It’s true that by trading the smaller time frame you will have more trading opportunity but as a professional trader, you should search for quality setups in the market.
Ignoring the long term trend: There is a strong proverb in the forex market that trend is your friend. All the professional traders always make sure that they execution g trade in favor of the long-term prevailing trend in the market. But when it comes to the novice traders they always focus on the lower time frame and thus take too many trades in the market against the prevailing trend in the market. If you truly want to become a professional forex trader in the financial world then you need to find the prevailing trend in the market by opening your online trading platform. Once you find the prevailing trend in the market then do your technical analysis in the market and try to find possible setups in favor of the long-term prevailing trend. There are some experts who often use the multiple time frame analysis to eradicate the false trade in the market. So if you are relatively new in this industry try to use the multiple time frame analysis features to maximize your potential profit in the market. It’s true that you will have some tough time at the very beginning but you need to stay focus at any cost.
Trading with emotions: Trading the financial assets with your emotions is one of the most dangerous mistakes that you can make in your trading career. Most of the novice traders in the forex market open their online trading platform and very often they take a trade based on their emotional decision. But in order to make a profit from the forex market, you need to make sure that you understand the market dynamics very well. Always make sure to execute your trade in the market based on the major three types of analysis in the forex market. All the professional traders always make sure that they are trading what they see not what they believe. If you become a full-time professional forex trader then it’s very obvious that you will have some losing trades in the market. But if you have few consecutive losses in the market don’t over react rather you should focus on next trade. Don’t become emotional and double your lot size in the market to recover your loss. Since the forex market is high leverage market you need to learn how to use your leverage properly. Leverage can be like double edged sword and it will increase your risk exposure in the market if you don’t know how to trade with proper risk management factors.
Summary: Trading the financial instrument successful requires a clear understanding of the forex market. If you are relatively new in this industry then you should focus on high-quality trade execution in the market. Always take your trade based on the major three types of analysis. Since losing is just a part of the trader’s career, try to embrace you losing orders in the market just like the winners. And never trade the market with your emotions rather always look for rational logic in the market to trade different assets.