Trading forex is a risky business, and there are many mistakes and pitfalls that catch out a lot of inexperienced traders who are new to the game. In order to be successful in the long run and not end up as one of the many traders who lose all their investments and pack it in quickly, there are a lot of common mistakes to avoid when trading with Hantec Markets. Here they are to help ensure you are a lot more successful trading on the currency market.
No Trading Plan
Not having a trading plan is arguably the worst mistake any trader can make. Being unprepared for such a high-risk activity where such high volumes of currencies are trading hands is irresponsible. It’s simple to avoid this, by creating an effective trading plan with the help of expert advice. Amateurs often don’t have one in place or are more likely to ignore it when they do.
Letting Emotions Take Control
It is important to separate your emotions from the professionalism of trading to ensure that you do not stray from your trading plan. Trading forex is essentially a form of gambling, so when traders are making profits they can get carried away, or when making a loss attempt to win it all back. Sticking to the plan is the best course of action though.
Risking Too Much or Too Little
In a similar way, risking too much, usually believed to be more than 1 or 2% of your capital, can lead to quick losses. However, not taking enough risk will mean you never end up making incredibly profitable trades. Finding a good balance between the two is ideal, especially when dealing with leveraged positions.
Lack of Patience
Nobody becomes rich from trading forex overnight. It is a long game, with the best traders possessing tons of patience to see their plans pay dividends. Even the best forex traders still make more losses than wins, it is just about knowing when to exit a trade and when to stick with it.
Trading After News
Political and economic events have a big impact on currency value and after large news events it will see the market become incredibly volatile and aggressive. This brings about a lot of risk, so it is advisable to wait until the effects are over rather than following the crowd and trying to make a quick win. Avoid these mistakes and you should be able to become a successful forex trader in the near future.