Online trading enables you to work from home and spend time with your love ones. But this profession is not recommended by many people as they feel people tend to fail in this. Many people fail in this profession because they make some silly mistakes and they end up loosing their capital money.
No Trading Plan
Make money is not a trading plan. A trading plan is a blueprint for trading success; it spells out what you see your edge as being; if you don’t have an edge, you don’t have a plan, and likely you’ll wind up a statistic (part of the 95% of new traders that lose and quit). Most traders confuse themselves with stop loss and targets = trading plan. Trading plan means you must be knowing when to cut loss and when to let profits run.
Trading against trend
There is a huge difference between buying cheaply on the way down and buying cheaply. What was a low price quickly becomes a high price when you’re trading against the trend.
If you put on a trade and it’s not working make sure you exit properly; don’t compound the damage. If you’re in a winning trade don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get use to it. Most traders wait in loosing trade and exit almost instantly as soon as their target hit . You should be having a trailing stop loss for at least 25% of your positions to maximize your gains .
Trading Short term
If you’re profit target is less than 20 points don’t do the trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits. Many traders want to get rich like they are gambling . It could be a deadly move for your trading account so avoid trading like a quickie .
Not trading on time
Most of the big moves occur around news time. The volume is high and the moves are real; there is no better time to trade fundamentally or technically than when news is released; this is when the real money adjusts their positions and as a result the prices changes reflect serious currency flow (compared to quiet times when Bank traders rule the market with their customer order flow. This is a bit tricky most traders avoid trading around news and some traders enjoy it . So all depends on your risk appetite.
No Stop loss
This is biggest factor why many traders end up failing. Stop loss is one of the most important part of trading. If you compromise with stop loss you end up risking your capital. People tend to adjust stop loss with market going down or up. They even remove the stop loss when market dont run in their favor. Eventually they end up losing their capital and blame markets. Read why you should use stop loss in every trade
Trading for fun
I have many subscribers who usually take a trade when we do not give any signal for 2-3 days. They usually take position before us and end up loosing. One day i asked one of my subscribers why did you trade when i didn’t give any signal. He replied, he was getting bore and trading is fun. He feel good when he is in trade and without trade he gets bore.
This is not a game, serious money is online so do not make that mistake and stay idle if your signal provider asked you to sit in market. Do not trade if you do not know when to exit and where market is going. You hired a guy to give you trade recommendations. Wait for his instruction and trade.
Commodity or Forex markets are very good opportunities to make money but sadly many traders think it as a casino. They want to rich overnight and make money in millions by investing their capital in thousands. I would strongly advice you to be realistic. Trading is good business and generally give better returns than your conventional business. But in the end its a business only. Do not take it for granted and do not be unreal.
Let me know in comment section what you think about biggest mistake of traders or share your mistakes.