This article is devoted to the consideration of the most basic mistakes made by traders in the process of trading in the global financial market Forex. All the examples of mistakes listed below in the article are often made by many traders from stock exchanges. And given the fact that the entire structure of trading in the Forex market is similar to trading in stock markets, then examples of these errors can also occur in Forex.
Since everyone can make mistakes in trading, this article is intended for both beginners and experienced traders. After reviewing the statistics of negative reviews on the network about Forex – you can come to one natural conclusion – that all traders who are unsuccessfully leading the trade – make the same mistakes.
The most common problem of asset managers is greed and deviations from the conditions of the trading system. In most cases, such retreats lead to a stop out, as well as to subconscious depression, which not only leaked money, but also missed the chance of good earnings. Few of the unsuccessful traders are aware of the real problem of draining their deposit.
Most people attribute all the problems to the market itself – then the trend did not go there where it had to go, then the big drawdown came out, then something else. To the extent that they can even express the opinion that Forex trading is a scam. People do not believe such requests! Such records could be left only by pseudo-traders who did not make a profit because of their excessive greed.
Reasons to drain the deposit
So, now proceed to consider the reasons for draining the deposit.
The first mistake is opening a buy position at the very top. Due to the lack of certain knowledge, very many traders enter the market with the opening of a buy position, precisely at that moment, when, in fact, it was already necessary to close this position, since the moment the currency price rolls back. Of course, there are situations that after the price rollback, the trend is even more forcefully directed towards the open position, but such miracles happen rather rarely. Therefore, we will attribute this fact to one of the most striking mistakes in trade. In order to avoid this problem, first of all it is necessary to learn how to correctly analyze the situation on the financial market itself. How? With the help of news, some additional indicators , the economic calendar and a cup of excellent coffee.
It is also worth adhering to a few more rules, such as:
– not to buy a currency in a fast-growing trend that does not have support in terms of further growth – such a trend is unstable and it can change its direction at any second and roll back;
– make a deal if real visual breakdown of support or resistance lines is carried out – such manipulations will help to determine whether the trend actually went in the right direction or if it is only in the process of correction.
Another common mistake in the trading process is the opening of a sale transaction at the base. Such a mistake is made as often as buying at the top. The essence of this problem almost simply displays all the same actions as buying at the top, only in the reverse order and in the opposite direction of the trend. That is, the actions and the essence of this problem are the same as those given above, only everything is no longer based on buying, but on selling currency.
In order to avoid such an error, the trader needs the following – simply not to enter the market during an unreasonable increase in the currency price. We enter only when there is a real confirmation of the input. At the same time we go with a safety net. That is, we do not go in a full lot, but in part of the lot. And if the trend goes as we need – in every 3–7 points you can add small mini lots in order to increase profits.
By adhering to the above tips, you can not only protect your deposit from the stop-out, but also be able to carry out trade transactions without any risks, while making a profit in full.