6 COMMON MISTAKES TO AVOID WHEN TRADING
1. TRADING OUT OF BOREDOM; Most traders fail to realize that they need to always wait for the market to present an opportunity that fits into their trading plan. Sometimes these opportunities may take more than a day or 2 to show up. As a result of that, some traders do not have the patience to wait for the market. They just go right ahead and trade whatever they see because they are bored and tired of waiting for the right set up.
2. PLANING THE TRADE AND NOT TRADING THE PLAN
The goal of every trader is to make consistent profits from the market. If you have carefully planned your trade, it is in your own best interest to take the trade when the opportunity is ripe. Don’t just plan a trade and watch it play out in your anticipated direction without you taking the trade. If you do not take the trade, how do you want to make profits? You cannot make profits by just watching and waiting. You have got to take the trade.
3. NO CLEAR TRADING STRATEGY; Most traders trade with the ”anywhere belle face” attitude. This simply means that they trade without any clear back tested strategy on how to attack the markets. Once they see the candle going up, they click buy and when they see the candle going down, they click sell. Trading without clear reasons for entries and exit is one of the major mistakes to avoid when trading.
4. HOPE TRADING; When you refuse to accept that you are on the wrong side of the market, you are making a major trading mistake. Most traders let losing trades run with the hope that the trades will reverse and turn into profits. In most cases, these trades never reverse. This usually causes the trader to incur more loses which could eventually lead to loss of account.
5. LETTING PROFITABLE TRADES TURN INTO LOSSES
The reason for trading is to take profits. Plan your trades in such a way that you are going to take profits no matter how much it is. Too many traders want their profits to keep running forever. Mark out clear areas where you want to take profits and ensure you take profits when price reaches your target areas.
6. RISKING RANDOMLY; This is another major mistake traders make. On social media, you hear a lot of traders say ”nack am better lotsize”. If care is not taken, traders will run into huge trading losses if they follow such advice. Your use of lotsize should be planned according to the risk to reward ratio and your capital size. You can calculate your risk per trade using pips calculator like the one on myfxbook.com
7. NO EDUCATION; If education is expensive, try ignorance. Unfortunately most traders choose to go the ignorant way because they think it is cheaper. In actual fact, it is more expensive to trade without knowledge about the markets. It just like jumping into the swimming pool without clear knowledge on how to swim. There are no two ways about it, you will eventually drown if no one is there to save you. Before you start trading, seek to learn what the forex market is about.
8. IGNORING FUNDAMENTAL; News events have an impact in trading. Do not make the mistake of focusing so much on fundamental that you do not pay attention to the news. High impact news like CPI, FOMC, NFP cause volatility in the markets. If you are not prepared ahead of time, you may be caught on the wrong side of the market.
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