Today we continue to talk about traders mistakes. In our last article, we talked about mistakes in investing, and now we will discuss critical points for trading.
The most important thing that any trader should know is that mistakes are an integral part of the life of any active person. No one is safe from mistakes, and everyone has them, whether you are a professional trader or a beginner.
Most errors in the market are due to the fact that the trader did not comply with fundamental or tactical rules. They are also mistaken when there is no basic knowledge regarding market processes. Often, beginners trade at random without using a trading strategy. The result is a fiasco. And even if you are haunted by a series of victories, it is a matter of time before your intuition fails.
Let’s figure out what you should always remember.
First mistake – lack of preparation
So, the theater begins with a hanger, and trading – with training. Trading at random always ends in 100% loss. What needs to be studied in the first place is the structure of the market, by what laws it lives. Pay attention to trading participants, understand who market makers are and how they affect the market.
Not the last role is played by the psychological aspect. The knowledge of the psychology of the crowd will help you to resist the impulse and stay out of the game when large players trap small speculators into a trap. Remember that you decide which trader you want to become: an amateur trader or a professional. It all depends on the level of your knowledge and training.
Mistake №2- Trading Without Rules
Here we are talking about the rules for yourself. Before switching to real money, any trader who respects his time and energy will train on a demo account or on a cent account. This is necessary in order, firstly, to understand whether a trading strategy works or not, and secondly, to test yourself, your patience, endurance.
The market reveals in a person both good qualities and bad ones. Now we are talking about negative qualities: greed and fear. The desire to earn superprofits grows into uncontrolled greed, which blocks prudence, as a result, the trader stays out of the transaction, remaining in it beyond what is needed. Fear of losing everything makes the trader hastily leave the market, without waiting for the price to return to the positive territory.
Drawing up a list of rules allows the trader to fix a few dozen basic requirements. Remember that making a list is only half the battle, then you need to follow each item. Repeat the rules before each transaction, at the beginning of each trading day, until they are fixed at the level of reflexes.
Third mistake – no goal, no success
One of the most common mistakes newbies make is aimless trading. Many trade simply for the sake of the process, and not for the sake of the result. Every trader must remember that the goal is already a huge part of the process of achieving success. Before you open a deal, you need to know when to exit it. There should be two scenarios in front of you: what will you do in case of success, and how in case of failure. It is ideal to use stop loss and take profit. These levels will be your end points, and you do not need to move them under any circumstances.
So, to summarize what a novice trader needs to know:
- Lack of training is not permissible – for success you need to learn, expand your horizons.
- Trade by the rules. Rules allow you to discipline a trader. This is the anchor that will hold him in the ocean of emotions that seethe in every trader during the trade.
- Aimless trades lead to losses – trading for the sake of trading will not bring success, you will only reduce your deposit. Set a goal and follow it.
As you can see, the rules are simple, but they are so important for successful trading. Observing them you will increase the chances of your success by an order of magnitude. After all, discipline plus a trading strategy – lead to success in the market.
