Nothing makes mistakes.
So, while learning to trade you’re going to make multiple mistakes but these will teach you.
When you will have a positive approach towards your trading you will be able to learn things. The smart move is to make sure that the same mistake isn’t made repeatedly.
Here, your money is at stake so the sooner you learnt from them, the better.
Today I will tell you about some of the common mistakes that traders make and guide you on Xpoken as to how to avoid them. These tips will help you analyze the situation and go further.
Over-Trading
When a person starts trading he often puts his money at way too many places and this causes distress. All of the Beginners usually tend to make this mistake.
Over-trading leads to losing money in the long run also. These people are considered to be trading too much. Honestly, there is no use to be in multiple trades at once.
Being in more than one trade can be easily termed as over-trading. There certainly is no practical explanation to be in more than one trade at a time, ever.
Being constantly in more trade is like a temptation, it gets hard to ignore with time. This makes a person come up with reasons to be in trade. They make up signals that might even be not there.
The simple plain truth here is that, if you cannot control yourself and stop over trading, you will not be able to make consistent money.
Overthinking about Trade and Analyzing Charts
This can also be termed as similar to over-trading. It consists of thinking too much about the trade. Traders often make the mistake of flipping through charts again and again. Even when there is nothing new and no price action signal to trade. This overthinking eventually leads to taking up some plans one wouldn’t have normally taken up.
At this point check yourself if you’re overthinking about everything related to trading that you’re in. Then, it’s safe to say you are over-trading in a way.
Relying on Short time Frame Charts
Another huge mistake that a new trader makes is Day trading. This is a widely used term, so many people have heard about it. But, they don’t know much about it. Partial or less knowledge leads them down the wrong path since the start. Sometimes they rely on trading off of a short time frame, as short as 5 minutes. It leads to the type of over-trading you will call gambling. This may also lead to gambling addiction.
With the above things, remember to ensure that you are not directly dealing with real money but using a demo account at first. Confidence is gained gradually when you are trading. So, look forward to the small gains you make and keep investment limited to one trade. Gain confidence within yourself and then trade with proper knowledge about forex.