Trading can be a daunting task. Unless you are familiar with the investment industry, you might even blow up the trading account in less than a month.
This is not the gambling industry where you can trade with big volume and turn $100 into $1,000 in less than a week.
Though you can do so by using leverage, it will put your trading career at great risk.
One of the key reasons why the naïve traders are losing money is because of high risk.
So, if you want to survive in trading make sure you are not taking too much risk to earn more profit. You have to stay in a safe zone to keep your fund safe.
Everyone is looking for the Holy Grail in the Forex market. But today, we are going to discuss some of the key facts which cause retail traders to lose money.
Overtrading
Overtrading is a serious mistake made by the naïve traders. They think the experienced traders in Singapore are making millions just by placing more trades.
Have you ever assessed the portfolio of a successful trader? If so, you will realize the importance of a professional trading approach.
You are not required to place hundreds of trades to earn decent money. In fact, you should limit the number of trade execution with a great level of confidence.
If you can execute one good trade a week, it can give you enough to profit for the whole month. Instead of looking for the numbers, try to improve your trade execution.
Trading Against the Trend
Trading against the trend is a very big mistake. The Forex market is super complicated and it’s not possible for an individual to analyze the price with a high level of accuracy.
Traders need to rely on market dynamics to speculate on the price movement.
When you learn about the technical analysis, you will notice the market loves to move in favor of the trend.
So, if you place a trade against the major trend, there is no way you are going to become a successful trader.
You have to learn the key techniques to place the trade in favor of the trend. By doing so, you can greatly improve the trading process. Try to analyze the daily time frame to find the major trend.
Trading with high risk
Trading with high risk is very common among the naïve traders. They open a high leverage trading account and try to earn huge profits.
Leverage is only applicable for professional traders who have strong knowledge of risk management policy.
If you are new to this market, you should never try to trade the market with a high leverage trading account.
If you do so, you will be placing high-risk trade and losing more money. No matter how much money you have in your trading account, you should not risk more than 2% in any trade.
Follow the safe method in trading and you will become a successful trader.
Trade With Discipline
Breaking your rules in the Forex market is a very big mistake. You should see the successful people so that you know how carefully they execute their plans.
Being a trader, you must have a strong trading plan in which you will use to place random trades in the market.
But having a plan doesn’t mean you won’t be losing money. Losing trades are very common and you must get used to it.
After losing the trades never break the rules to earn more money. Stick to the major trend trading strategy and trade with a long term vision.
Forget about the aggressive approach and learn about the conservative trading technique.
If required, start maintaining a trading diary so that you can write down the details of each trade. Unless you can stick to the basic rules it will be hard to trade the market.
