Have you ever made mistakes in your trading career that you are embarrassed about? Well, there might be some in your basket that you are pretty much not willing to share with others. However, you are not the only ones here, there are thousands of others like you in your shoes. Even, some successful investors make such mistakes. Now don’t laugh at them. They are also humans and they have the right to make mistakes too. When you are making these mistakes because of a lack of knowledge you may face problems that have arisen because of your workload and stress.
But don’t get disheartened by that, because these mistakes are probably what help you to get back on your feet after stumbling. But it is only helpful when you are aware of those mistakes and don’t make them again. However, some investors are not aware of the mistakes they are making. In such cases, these mistakes can prove themselves as potentially dangerous for your trade.
In this article, we are going to highlight some of the common mistakes and give you powerful tips to solve this problems.
Forgetting to use a stop loss
We guess there is no need to introduce what a stop loss is and what it does to your trade. But still, for the new ones in the group, we will be having a brief talk on what stop-loss is. So, stop loss is the level or margin which an investor puts on before entering any trade. After entering the trade, the stop loss activates and when the trade is facing a loss, the trade is closed at a point where the stop loss is set to prevent losses from getting too big. This is a great way to keep your losses small and not let them get too big. However, since you have to set it manually every time before you enter a trade, it is not impossible to forget about it at times. But in case you are not lucky enough, you have the potential to lose your money if you don’t use a stop loss.
The best way to avoid such problems is to slow down at what you are doing and make a record of your actions. You shouldn’t be in a hurry to enter a trade. Take your time, assess the scenario around you and if everything seems natural, then execute the trade. Make sure you are trading with a well-reputed broker like Saxo. Visit their website and see their premium features as it will help you to understand the importance of trading with a well-established broker.
Using the wrong leverage
Seeing that the Forex market provides a large quantity of leverage may seem pretty lucrative. But let me tell you a secret. This is a booby trap set for people to earn more money from you. Leverage is a necessary evil that you should never be depended on too much. Sometimes taking higher leverage opens the door for more trading opportunities. But for beginner traders, it is not healthy to trade with such a high amount of leverage. Mismanagement of leverage is often the reason people lose money in trades.
Now, we are not saying that you cannot use leverage. But we mean to say that you should only take on leverage when you are confident enough and have gained a bit more experience in this industry.
Listening to others’ advice
We would say that this is the most foolish mistake an investor can ever make. Who knows the most about your trading? You do! Whose money do you invest in your trades? It is yours. Then why would you require to listen to what others say? Though that advice may seem pretty profiting it might not be the best one for you. So, you need to stop listening to what others say about your trade. Your speculation and analysis are enough to get you well onto your success.
Now, you can make mistakes once but never twice. Therefore, be responsible for the mistakes you make and try to solve find solutions to problems and avoid repeating mistakes wherever possible.