Making mistakes is quite natural while you are trying to learn and apply new things.CFD trading is not a skill that we are born with. If you are new to trading, you will make a few mistakes and it is quite natural. No matter how cautious you are while trading, you will lose some money. If you continue to repeat those mistakes, nothing can stop you from losing your trading balance. New traders, along with experienced traders, often make some common mistakes which leads them to lose plenty of money. It can be reduced by following a few rules. In this article, we will talk about a few common mistakes. and you might understand those and could avoid repeating them. By avoiding these mistakes, you can easily execute trades like pro traders. So, read this article very carefully to improve your skills.
Trading with no plan
If you ask any experienced trader to give you some trading tips, the first thing they will mention is a trading plan. Most traders join the trading industry with a trading plan. But after rookies start to avoid the trading plan and try to earn a big amount of money with aggressive steps. This is where they started to have a bumpy experience in trading. It is quite a common problem that both novice and experienced traders face. You must create a robust plan like a pro-Aussie trader and only then can you expect to earn steadily.
Using high leverage
Leverage makes the trading industry more lucrative because it is the reason whyanyone with even a small amount of capital can start trading. But the thing is, we always encourage that trading is no place for making money with small capital. When you are using leverage, your risk will multiply greatly.If you lose some trades, you will become frustrated. It can also lead you to over-trade because you are not making the exact profit you wanted. Open CFD account with low leverage so that you don’t have to lose money while taking the trades with aggression.
Not seeing the big picture
Traders often rush into decisions like when they think they may have found a trend in a shorter time frame. But they don’t look at the higher time frame to assess the trend. As a result, they open positions for a longer period and face losses. This type of situation occurs just because of not looking for the bigger picture of the market. So, whenever you are thinking about going for a position, have a look at all the time frames. It will not take much time.
Ignoring money management
Money management is a must for every trader.If you want to stay alive in this industry you have to trade with low risk. A new trader always tries to follow a money management rule but as they become experienced they feel like not following any money management rule, because they think their trading strategy is enough to keep then in profit.
Letting losses grow
You should never let your losses grow higher than your profit no matter how good your analysis is. Let’s say you have 3 open positions where 2 of them are in profit and 1 is running at a loss. But overall, you are in profit. In this type of situation if you think that you will wait for your losing signal to keep open, then you are making a big mistake. The trade which is running at a loss might take away all the profits that you make from your other two trades. So in this type of situation, you need to close your trades to ensure the safety of any profit you have made.
There are more mistakes that most of the trader make and we have just talked about a few. You must look for other mistakes and, if, as a trader, you can avoid them then you will be benefited greatly.