Trading is not an easy thing. You can profit of hundreds of dollars a day with demo accounts, but so real You instead use the money loss.
To be successful in online business trading required persistence and perseverance, as well as in any other business. There is no term so millionaire in 2-3 days or 2-3 months. You have much to learn and continue to hone the skill trading.
To
reproduce the experience of all the ins and outs of trading, and market
movement behavior could You understand, your intuition will be trained,
a moment with just a glance view chart you already know where the
market is going to move.
Made a mistake which resulted in losses for traders is common. Professional
traders has definitely been experiencing loss, but over increasing
their experience, the percentage loss will be much reduced compared loss
when starting to practice trading.
The following 7 major mistakes when traders start trading:
1. rush to Trading Live
Less patient, usually so when starting to learn trading. Eager to be trading live with real money in order to directly profit but ruled out trading demo.
With
the demo trading you can learn to understand the pattern of the
movement of the market, testing the trading system and also learned to
understand the characteristics of the products which you like (Forex,
stock, commodity index).
And how long should the demo trading for?
There is no rule how long it takes, if you already feel ready, please proceed to the next step, trading with a live account.
A
little advice, while trading demo there is no harm in making little
notes about your trading history, such as: what error you do so result
in frequent loss, and so on.
2. Taking too big a risk
This is a mistake most traders do, too big to take risks.
In their thinking is how to make a quick profit. A day should be able to profit of $ 100, $ 500 or $ 1,000. Their
Mindset is already poisoned, that Online trading is a great shortcut
earn large amounts of money, they assume it's easy to do online trading.
Risk Management
Due to the huge profits want fast, risk management is ignored. The size of the lot that is used does not account for the number of your trading account.
Some professional traders suggested, for once the trade should only be risking 1% of total account. While a small account for under $ 1,000, up to a 5% risk per trade may still be on tolerance.
Sample computation lot trading:
Trading Account for $ 1,000. Risk = 2% Stop Loss (SL) = 50 pips.
How much does the lot being used?
$ 1000 x 2% = $ 20 – > All trade a maximum loss of $ 20.
$ 20: 50 pips = $ 0.2-> 1 pips worth of $ 0.4
The size of the lot being used is 0.2/10 = 0.04 standard lot.
Small
Lot will probably limit the amount of benefits that you can get, but in
online trading, the most important is to limit losses that might occur.
With 0.04 lot, you will have a spare 2500 points (1000/0.4). Prices move contrary to your position as much as 2500 point or you loss in 50 consecutive times, your account has expired.
A bit impossible moving currency up to 2500 points in the short time it took months, maybe even years. If the loss up to 50 times in quick succession-also it's very too, though for a first time trader trading.
3. Low Risk Reward Ratio
Try to compare, the winning ratio of 90% with a winning ratio of 70% which is better? (win ratio 90% out of 100, meaning 90 trade including trade profit – red)
Jawabanya,
not necessarily a victory ratio of 90% will be better than 70%, because
there are still other factors that should be taken into account, i.e.
risk come rewards ratio.
As an
illustration, mostly traders, if being a position minus the trade will
be detained for a long time, until the prices come back positive. Conversely when new profit 5-10 point only, the position already directly in close. This is what causes the risk reward ratio be lower.
If
you've got the SL 50 pips profit, while taking away 5 points/trade,
with a winning ratio of 90% skalipun, losses are still not covered.
Loss: 50 x 10 trade = 500 pips
Profit: 5 x 90 trade = 450 pips – > still loss 50 pips
Risk reward ratio: 5/50 x 100% = 10%
Try to compare it with a winning ratio of 70% (30 trade loss – 70 trade win), but take a 25 point profit/trade.
Loss: 50 x 30 trade = 1500 pips
Profit: 25 x 70 trade = 1750 pips-profit > 250 pips
Risk reward ratio: 25/50 x 100% = 50%
4. not soon realised when the Wrong Position
Every time you find your trading in a negative position, usually your little heart will always strive against reality.
"Oh ... This cuman while ... a few minutes more the price is definitely turning, a position which was minus will soon so a plus. "
"Oh ... This is already too low price ... There may be down again, surely soon will rise. "
Yes ... You don't want to admit that you are indeed wrong position. So the position of the loss left open, continue to do just keep hoping that prices reversed direction.
Finally, not profit or break-even position in may, but the price and thus continues the greater the loss.
We
recommend that you return in a more careful analysis by the indicators
you use, if you are indeed already trade position is correct and there
is still a profit to Kansen. If indeed no Kansen, preferably directly on the cut rather than inflicting losses are larger.
5. Overtrading
Some traders may think, with more and more trade then chances of profit will be even greater. But the reality is just the opposite, with more and more trade then the risk of losing the money that it is getting bigger.
With
many conducting trade, the analysis is done carefully and be less
selective in choosing less trade opportunities that exist.
In
addition the possibility of committing errors are also getting bigger,
it could be a thin nonetheless taken to soon do trading.
Overtrading
Good step is take the opportunities according to Your analysis of 90% true (you also very sure if analysis won't be missed). So it is highly selective in choosing trade opportunities.
I took a bit of an overview of the example above, suppose you simply do 2 times a day with trade TP 25 points respectively. How can you be in a month with a capital of $ 1,000?
Take Profit: 25 pips/trade, in 1 month there are 20 day trading.
2 x 25 pips x 20 day trading = 1,000 pips/month
1000 pips x $ 0.4 = $ 400
Profit $ 400 a month with a capital of $ 1,000 is a very fantastic figures, Net Gain 40%.
6. Investments with the money Still Needed
Never use money investment that is still required for other purposes. Trading is directly related to the psychology of traders.
If
you are using money that may still be needed for other purposes, you
are certainly not willingly if the money was missing, as a result of
your trading became full of misgivings.
"Wow this is money paid for next week's kok son SPP, how about loss. Want to pay to use what later? "hehehe
There is no peace when trading, as it always was-was trading analysis becomes weak.
When was negative, as soon as the floating rush at the close, the fear of minus the more. Whereas the price there is still a great opportunity to turn around. In other cases, when a new profit a bit close, but directly on the possibility of a larger profit is still there.
Use money's "Idle" or money that is set aside for investment, not money projected for other purposes.
7. Let your emotions control you
If you are a trader who has long trading, you certainly already know that the price movement is full of traps and pitfalls.
Price
can suddenly drop, fishing traders to sell, a few seconds later the
price turned up again quickly, making trader caught in a position to
sell, but the direction the price is actually rising. Yes ... You enter the trap ... and again losssss ...
Angry Trader-Trading Psychology
Often the loss caused trader control and emotions. And if trading use emotion, a great trading system, seberapapun I'm sure 100% of your trading will amburadul.
Open trade indiscriminately, loss of focus, lost the discipline on the system and it is definitely the end result loss again.
Posted in: 7 major mistakes Traders