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Being a human being you can’t expect to finish a task without any errors. Even experienced professionals have to deal with their mistakes. Just like our traditional business, Forex trading requires pin perfect execution of your plan. The rookie traders often think a perfect trading strategy will help them to make a profit all the time but it’s not all true. You must prepare to lose trades regularly. Does this mean, the rookie traders will always blow up the trading account? The answer greatly depends on their skills. As a new trader, you have to avoid the most common mistakes in trading to protect your trading capital. Let’s highlight the key mistakes made by professional traders.
Ignoring the market trend
Trading with the major trend is not so easy. The new traders often trade the lower time frame data and lose a big portion of their investment since they trade with the market retracement. To protect your trading capital, you must find the long term trend in the daily time frame. Use the most recent swing highs and lows of the market to find your desired spot. Never ignore the market trend since it will make you a loser in the Forex market.
Trading with emotions
Emotions can be very dangerous for retail traders. Those who are relatively new to the trading profession are always losing money since they trade the market with emotions. Unlike the rookie traders, the pro trader’s uses simple logic to find great trades. Being a fulltime trader, try to use the best online trading account so that you get free access to premium tools. If you ever get confused with your trading result, take a small break but never trade the market with aggression. Revenge trading is another key reason why the retail traders are losing a big portion of their investment.
Using chart pattern in the lower time frame
Do you know the reason for which the intermediate traders are losing money? If you dig deep, you will notice they are trading in the lower time frame. Many they use the 1-hour time frame to spot the major chart pattern. When it comes to chart pattern trading strategy, you must rely on the long term data. Try to use the daily or weekly time frame since it will help you to make a better decision in each trade. Follow a conservative trading technique and you can easily master the art of trading.
Buying signals
The experienced traders are leading their dream life. Regardless of the economic conditions of the market, they don’t have any problem in securing the profits. The rookie traders often buy signals from the experienced traders to make a huge profit. Things might work at the initial stage but if you consider the long term outcomes it won’t take much time to understand why you should never trade with other people’s advice. Learn the manual art of trading and trade and focus on price action trading strategy. Consider this as your business and use the demo account to develop your trading skills. Once you feel confident with your demo trading performance, open a real account and start to trade the market.
Using obsolete trading strategy
No matter how good the trading system is, you need to update the trading strategy regularly. Forex market is dynamic and without keeping yourself updated with the latest market news, you can’t make a consistent profit. If you lose a few trades in a row, stop the trading real market. Use the demo account and see how things work. If necessary, bring positive change to your trading system so that you can easily make a profit. Keep yourself updated with the latest market news and you will never have to lose big trades.
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