Making a regular profit in the retail trading profession is not a child’s game. Just because you have gained access to the trading platform, doesn’t give you the guarantee that you are going to beat the market and become a millionaire trader. Statistically speaking, more than 95% of the traders are struggling in this profession. Even after having such easy access to the global market, why so many traders are losing money? Well, most investors fail to identify their key mistakes at trading. They keep on making the same mistakes again and again for which they lose a significant portion of their trading capital.
Mistakes are very common in real-life trading. In this article, we are going to identify some of the prime mistakes for which people are losing money. Moreover, we also give some amazing tips which will help you to overcome these key problems.
Deciding with emotions
Having a strong mindset is very crucial to your trading profession. You should not be expecting big winners in the market while you are taking trades with emotions. The risk factors should always be controlled and you must find a simple way to take the trades in favor of the trend. You need to trade what you see in the chart. If required, you may start taking some psychological sessions to improve your endurance level. Never feel shy to admit the fact you become emotional at trading. Unless you are honest with yourself, you will never realize what it takes to become a successful trader.
Though stocks or forex trading in Australia is a very popular form of business, very few traders know the proper way to execute high-quality trades. Most people make emotional decisions and make their financial conditions much worse.
Stop taking low-quality trades
You should be taking the trades with strong patience. Without having strong patience, you start overtrading the market. You will keep on taking the trades without assessing the quality of the trade signals. By doing so, you will impose a great threat to your trading career. Some experienced traders wait for weeks only to find one good trade. Being new to this market, you should have such a mindset and only then you will stop paying attention to the low-quality trade signals.
Ignoring the long term trend
The trend in an asset doesn’t get changed so easily. It takes strong economic news to cause a major reversal in the trend. The new traders often learn the basics of trading and expect to take the trades by analyzing the major reversal patterns. But they don’t realize the fact, reversal trading system is not designed for rookie traders. To become good at reversal trading techniques, you must have the skills to analyze market sentiment. And this is something which you can never learn by reading books and articles.
As you gain real-life trading experience, you will slowly learn to analyze the market sentiment effectively. Instead of making things complex, learn to trade With the IchimokuCloud in favor of the trend. Once you master this technique, you will no longer feel interested in the reversal trading method.
Ignoring the basic risk factors
The novice traders never pay attention to the risk factors in each trade. Based on the quality of the trade signals, they bring change to their lot size. But if you wish to keep your fund safe, you should be taking the trades by using a constant risk factor. As a new trader, we strongly recommend that you keep the risk factor below 2% of your account balance. But do not think that by taking a 2% risk, you are never going to lose money. Keep in mind, losing trades are nothing but the cost of trading. As long as you trade the market with a proper risk to reward ratio, you should be able to make a consistent profit even after having a few losing trades.