Emotions play a vast role when trading and not only beginners but from time to time even veterans are likely to commit mistakes in the forex market.
Breaking order and over trading are a few of the frequent mistakes that need to be avoided.
A few trading system before you start currency trading can help you avoid these frequent mistakes.
Winners and looser:
When forex trading, you should accept that you will not be correct always. Most traders trading the forex market will book profits as soon as they see that their trade is lucrative but will hold on to their losses in the hope that it will reach their buy price someday.
Traders leap to forex trading in India without having a clear trade plan in place. A trade plan is significant before you set your hands on trading.
Traders do not keep stop losses as they do not like to lose. Stop loss is a necessity as it guards your capital from being totally washed out.
Fiddling with stop loss:
Emotions come to play when a trade does not move in your direction and you start fiddle with the stop loss. This is not a right strategy that has to be followed.
Overtrading should be completely avoided. This is a common mistake that traders do. Trade only when there is a right trade opportunity. The most important thing is to stick on to your plan.
Maintain only a few open positions at a time. This will let you focus better.
The forex market gives you a lot of leverage and traders start trading in huge position size. This is not suggested.
The forex market makes money and there is no doubt about that. Conversely, do not keep impracticable hopes of becoming rich overnight.
Many traders are not ready to adjust to the varying market conditions. This only leads to repetitive losses.
Presumption of the trades:
The widespread mistake that traders do is that they presume that just by looking at the screen and the price they can aimlessly buy and sell and make money.
This is completely not true. Learn to read the technical charts and be conscious of the information to give you an idea of how to trade. These mistakes need to be kept away from to have a profitable trading account.