When newcomers come to the field of trade, they do many mistakes. This happens because the trading market is not known to them properly. They lose money, but from these mistakes, they learn how to deal with the future trading. You need to be happy if you have done some tactical and emotional errors. Because of these faults, you will understand how you need to resolve these issues. Remember one thing that you have to admit if you are wrong. No one is responsible for your losing streak. There are five trading mistakes that are discussed here.
Not Setting Stop-Loss
Stop-loss limits your risk. As a trader, you need to know how much risk you can tolerate instead of how much reward. Normally, 1:2 is the best suited risk to reward ratio for the traders. In the beginning, it is seen that most of the fresher do not set their stop-loss which can cause great destruction. Stop-loss helps you to manage your loss and secure your capital. When you want to hit the stop-loss, make sure that the trade price is correct. Reduce the size of the trade. Comeback with confidence and capital to do profitable trade.
Lack of Preparation
To do trade, traders need some preparation. You need to read some books and online resources. Fresher can think that trading is an easy process. They just need to open an account on the computer, and do trading by clicking on the keyboard. You have to take trading as a profession if you want to be a professional trader. Gain proper idea about the technical and financial tools. Try to understand the market environment. Learn how to make a good strategy. A strategy is crucial for your trading. This will help you to execute a trade. Read the trading journals to be up to date with the trend of the market. Most of the fresher think if they open trade, they will understand what to do. This can be possible, but you will face lots of difficulties. Being a new trader in Singapore, its highly recommended you visit https://www.home.saxo/en-sg/products/listed-options to know more about professional option trading environment. This will definitely boost your trading career.
After seeing the losing streak, the fresher becomes frustrated. So, they make some wrong decisions. When you decide emotionally, you will not get good results. Need to think practically. If you see a winning streak, do not be so excited. Excessive excitement can hamper your upcoming trade. As a newcomer, you will not be able to make an instant profit. You can be afraid of losing trade. Because of this fear. The traders change their risk-reward ratio constantly. Stick to your plan. Without preparation, do not take more trade. Control your anger, when the market goes against you. Many traders, because of failure, leave the trade in the middle. Do not try to control the market. Control your emotion what you can.
Risk management is the crucial point of trading. If you can manage your risk, you will make a large profit. Do not be greedy. This is true that traders want to make money in the trading market. Take your time. Do not take excessive leverage. Leverage will help you to make profits as well as it can finish your capital. So, take leverage carefully. This is necessary for you when your capital is short and you want to trade something for which your deposit is not proper. In that time, through the leverage, you can do the trade. For your short trade, you need at least $1000 initial deposit.
Obsession of Trading
Fresher thinks that if they trade more, they will get more profits. Do not try to do overtrading. Before trading, make a strategy. Trade what you have decided to do in a day. Professional traders do not trade more. They trade when their right time comes. Wait and make a wise decision. Learn how to maintain discipline. This will help you to be a professional trader.