Success in trading involves avoiding multiple traps, at least as much as possible, and identifying the real opportunity and the winner.
1. If there is a lack of a comprehensive vision for the market, both in terms of technical and fundamental analysis.
Analyzing the chart for one hour or 4 hours and obtaining a short-term perspective on trends is not the only thing you need to know how to do.
An additional analysis of the weekly or monthly schedule is required, in which the market can provide a very different table for the prospect. It is recommended to read the market from the longer-term charts to a short plan, when you plan to conclude the deal.
In addition, you believe that the fundamental point of view informs you about the important events that follow. By clearing the key fundamental data of the market, you can create the right impressions, which can make you feel better.
2. Typing the trend, or trying to wait for it to be processed without technical grounds.
Our desire to be one step ahead or to anticipate the possible price movement is characteristic of human nature.
As a whole, we would like to buy a given product when it is the cheapest and to sell it cheaper.
Unfortunately, in the absence of specific signals in this regard, this is not a winning method for the trader.
3.Going All In (Trying to Win It All Back)
Even if you have a risk management strategy in place, there will be times you will be tempted to ignore it and take a much larger trade than you normally do. The reasons vary, and you’ll be tempting fate to do her worst.
You might have had several losing trades in a row, which will make you want to earn back some of the losses. A winning streak can make you feel as if you can’t lose. There will always be one trade promising such good returns, you are willing to risk almost everything on it.
If you risk too much you are making a mistake, and mistakes tend to compound. Traders have been known to their stop-loss order in the hopes of a turnaround. Many also get caught up keeping their margin, telling themselves it will turn around and they’ll win big.
When you feel this way, stick to your 1% risk per trade rule and your 3% risk per day rule. Resist temptation, stick to your risk management strategy and avoid going all in or adding to your position.
4. There are high expectations for a long period of time.
Trading is not to make a whole fortune in one night, without taking the appropriate risks. Trading is not a doctor, a lawyer or a successful businessman. In trade, you can take more effort away from where you are, and perseverance and discipline to keep you going.
5. Lack of a plan or strategy for the trade.
A trader without a strategy for trading with a set of pre-defined rules for entering and exiting the market will not know what the profit or profit is. Dreams of a free trend and unlimited profits can only lead to a failure of a trader. The rule can be simple: you can’t get anything if you don’t know what it is.
6. Selection of inappropriate trading instruments and poor capital management.
The choice of assets for trading is one of the most important aspects. Identify the instruments that meet your requirements, depending on the requirements for volatility and margin, which you will need at the same time. The number of successes in the trade is influenced by the management of the capital. Great expectations are also provoked by high expectations.
7. Lack of patience and discipline.
You need to be patient. It might happen that you prediction of the direction of the the market might not happen immediately, but it could takes its time until it reaches that point.
8. Maintaining losing positions for too long.
The most successful traders do not stay in a negative deal for too long. After the tortoise is reached (if you have set a stop), you must accept the loss (which should be done at least). The traders, who hold negative positions with the expectation that the price will return to their advantage, are usually “doomed” to waste.
9.Take Multiple Trades That Are Correlated
You may have heard that diversification is good. Diversification is a strategy that depends on your knowledge, experience, and what you are trading.
If you believe in diversification you may be inclined to take multiple day trades at the same time instead of just one, thinking you are spreading your risk. Chances are you are actually increasing it.
If you see a similar trade setup in multiple forex pairs, there is a good chance those pairs are correlated. That is why you are seeing the same setup in each one. When pairs are correlated, they move together, which means you will probably win or lose on all those trades. If you lose, you have multiplied your loss by the number of trades you made.
10. Disability to accept your losses and take on responsibility for decisions.
After an unsuccessful deal, do not try to blame the other factors. The trader is solely responsible for his success or failure in the trade. The inability to change your own decisions can lead to a complete repetition of mistakes.
After any negative position, identify your mistake and try not to repeat it.