Trading errors are numerous among novice traders and often lead to the partial or total loss of the invested capital. Here is a list of some things traders are paying attention to as well as the most common trading mistakes. Before you even read some reviews, such as Instaforex review, and choose a broker, you need to be aware of what course of action you are taking in the market.
You need to set your own winning strategy.
A trading strategy is having a course of action. That allows you to know when to take a position. It directs you at what level to place your stop loss when to take your profits. All this allows you to structure your trading and not leave room for improvisation.
You should only take a position if your trading strategy tells you to. Taking a trade feeling on your own and being influenced by your emotions are all bad habits that you must get rid of in your trading.
Not following your trading strategy can harm the outcomes of your trades.
Some traders have found a trading strategy but allow some non-strategy trades. This is a habit of being banned! You should never, I mean never deviate from your trading strategy.
It is often easy to follow the rules when everything is going well when your strategy is leading you to win trades. But any trading strategy generates losing trades, phases of losses. And this is where it’s the hardest to follow your trading strategy. The accumulation of losing trades often leads you to doubt your strategy, to question it.
This is why it is essential to test your strategy over a long period (in demo first and then in real life) to gain self-confidence. If you know that your strategy is generating performance at the end of the month, it will be easier for you to overcome the phases of losses.
Another mistake is wanting to place trades that are not part of your strategy. You see a good opportunity, but your trading strategy is not giving you buy/sell signals. In this case, you should not take a position.
Following a strategy is taking all the trading signals it gives you, but it also ignores all the other signals!
Risk management is part of a good strategy.
A trading strategy is also risk management (money management). It tells you where to place stop losses and when to move them. Also,it only takes one trade without stop loss to drag you into a destructive circle that will inevitably lead to your capital loss.
It is therefore essential to define your strategy. Without a trading strategy, you leave the field free to your emotions, to irrationality. This is one of the reasons why the majority of traders lose out in the financial markets.
Dependence on analyzes from other traders
Many newbie traders seek to follow the analysis of other traders to the letter. You can draw inspiration from other analyzes to complement your own, you can use the analyzes of other traders to detect trading opportunities, but these trading signals must be in line with your trading strategy.
Copying a trader is not a solution. It does not make you progress in your trading. If you are dependent on signals from other traders, you will never be able to analyze. You will never be able to have your own signals. Imagine that the trader stops posting these signals. What do you do?