Forex trading is one of the most lucrative businesses in today’s world. The number of retail traders in the online trading industry is rising at an exponential rate. Due to the easily accessible in the retail trading industry, people are becoming addicted to online trading business. But sadly more than 90% of the retail traders are still losing money in the Forex market. So how do you become a successful Forex trader? To be honest there are no exact answer to this question as trading strategy greatly varies from traders to trader. But there are some common mistakes among the novice traders which you can avoid to save your investment. Let’s learn about the five most common mistakes in the trading industry.
Overtrading the market
Overtrading is a very common problem for novice traders. Once you know about the retail trading business, it’s very obvious you will try to your best to execute the trade. Unlike the novice traders, the professional traders are only executing the very best trade setups. You need to become a conservative trader to save your investment. Taking aggressive steps in the retail trading industry will result in a heavy loss. Always remember, you are here to make money so consider trading as your business. Never take any unnecessary risks even though you are 100% sure about a certain trade setup.
Ignoring the long term market trend
Trading with the market trend is one of the easiest ways to protect your trading capital in the long run. Those who trade against the market trend are bound to lose many trades. There is saying in Forex market, the trend is your friend. So always try to analyze the daily time frame data so that you can find great trades in favor of the long term market trend. Never execute any trade in the lower time frame as it might result in a heavy loss. Try to think like the professional Singaporean traders in the exchange traded funds community to become a profitable trader.
Using too many indicators
Indicators can be extremely useful but sadly the majority of the new traders don’t know the proper way to use them. They simply overload their trading charts with tons of indicators and loses a significant portion of their investment. You can’t analyze too many data from different kinds of indicators. Using one or two indicators is perfectly fine but if you use more than that you are just making things overly complex. Try to keep things simple in the Forex trading industry or else you will always end up by executing low-quality trades.
Trading the high impact news
Some of you might think news trading is the only way to make a huge profit in the Forex market. Though this statement is true to a certain extent if you consider the professional trader, you will understand they never execute any trade prior to the high impact news. They analyze the news data and try to synchronize the technical data to find good trade setups. Things might sound a little bit complex at the initial stage but if you use the demo accounts you can easily learn the proper way to trade the high impact news. But still, it’s better to avoid trading the news for the first two years of your trading career.
Trading the market with emotions
Becoming frustrated after losing a few trades is very common for the new traders. Unless you have complete control over your emotions, you will never be able to find great trades. Focus on the proper discipline and never execute any trade without knowing the technical and fundamental parameters. Try to execute a trade with 2% risk in each trade so that you can easily embrace any losing orders. Lock down your emotions and rely on the market analysis to become a profitable currency trader.