5 Common Mistakes Made by Amateur Traders
In this article we want to introduce and examine 5 of the most common mistakes of traders so that you do not commit them and suffer losses. Many reasons for the mistakes of traders, especially amateur traders, are related to psychology and self-control, and some of these mistakes are related to technical analysis, which we will examine in this article. By following these 5 points you can definitely become a better and more profitable trader, stay with us.
Anxiety
When you want to start trading with a real account, anxiety and fear come to you and make you unable to analyze the chart properly and find the right points to enter the position. To eliminate anxiety during trading, you can start trading with the smallest volume so that your initial fear disappears and after some time increase the volume of your trades.
Also, practicing daily meditation will help you reduce your anxiety and be able to analyze the chart and trade more calmly as a result.
Greed
Another mistake of amateur traders is greed, greed causes your profits to turn into losses and you turn from a profitable trader to a losing trader. Suppose you have opened a position and the market has moved up to your reward 2, but you are greedy and wait for the price to reach higher rewards such as reward 4 or 5 and then close your position.
But suddenly the market starts to move in the opposite direction of your position and activates your stop loss, at this time you could get reward 2 and exit the market with profit, but greed makes you lose and lose your profit.
Rushing to open a position
Many times, amateur traders are in a hurry to get more profit from market movements, and this causes them to enter positions at wrong entry points, and as a result, their positions are filled and they face losses.
The market always creates suitable entry points to open positions, and financial markets like Forex will always be there, so there is no reason for you to rush to trade. Also remember that the market is making swings and fluctuating movements every moment and you can enter the position in the next swings and movements of the market, so don’t worry about losing positions.
Placing a Stop Loss in the Wrong Place
Stop-losses are always considered a valuable tool to protect our capital, but how we use stop-losses is also very important. When you want to open a position, try to place your stop-loss behind a strong support and resistance on the chart so that your stop-loss will be taken care of by them.
Photo by TradingView
Use other people’s trading signals
Using other people’s signals for trading is a mistake for those who want to become a professional trader. If you constantly use other people’s signals to trade, you will never gain the necessary experience to become a successful trader.
One of the disadvantages of using trading signals is that you don’t know what strategy was used and it confuses you. Also, in many cases, the signal may be wrong or you may enter the position too late and lose as a result.
We hope you enjoyed this article