Mistakes that you should avoid
Trading is a two-sided career. It can be highly rewarding, but at the same time it has a great risk of losing a lot. It all depends on how you play with the trades. It is very important to be disciplined when making trades. Since it involves money, the real enemy would be your emotions. It is up to you how you will handle yourself to become successful in this field. If you are sure that you have what it takes to become a successful trader, read about the steps to making money through online trading. On the other hand, here are 5 common mistakes that traders should avoid doing:
Lack of preparation
This is the most common mistake that beginner traders do. They get too carried away by news of people becoming successful in trading that they think it can be easy to do. They end up entering in a trading career without enough research and strategies to follow on hand. They shouldn’t underestimate the time, effort, and dedication that professionals spend before becoming successful in trading. Simple research and reading is not enough. Consider getting hands on training or working on demo accounts to get adequate training before entering a real life trade.
Trading on emotion
It is understandable that traders become emotional when making trades since it involves the use of their hard earned money. The outcome of any trade depends on how the trader handles the exchange so following a trading plan is very important. However, there are a lot of cases wherein traders does not stick to their plan, especially if they see their assets losing value. They may probably be able to avoid greater losses, but thinking about the long term effect of this practice, they are more likely to trade based on their instinct instead of having a rational strategy, thus making it more like gambling instead of trading.
New traders have a tendency to trade based on the saying “believe what you see”. Depending too much on news and updates without analyzing can sometimes result in a loss. Remember, the market is affected by factors beyond our control. Just because you saw a stock sharply increasing its value doesn’t mean it will continue an upward course. Make sure to analyze all factors and conditions that could affect the market before making a trade.
Trading too high relative to capital
Trading with a high leverage can be very rewarding. However, it can also sometimes work against you as you can lose even more than what you can afford. Make sure to start trading with a small amount then continue working it up until you are confident that you can secure your profits with your skills and strategies.
A lot of traders enter trading thinking that they can exit with a very high profit. Having a vision is good, but make sure it is realistic and reachable. You should stop thinking you could enter a trade with $10,000 and exit with a million dollars in your account. Instead of anticipating how much you can make in the end, think about how you can improve your trading strategies. That way, you wouldn’t have to worry about making income as it will come naturally to you.
Online trading can be a very profitable career. However, it also comes with a lot of responsibilities and preparation before you can become successful in it. You may hear a lot of successful traders, but all of those people had passed a lot of obstacles before ending in their position. Make sure to get proper training, along with a reputable trading platform to guide you. In that case, may I recommend you Trade12, a trustworthy and reliable online trading broker with years of proven experience in the field of trading. With the different account types available to choose from, there is surely one that would fit any trading lifestyle, from beginner to the serious traders. In any case of problems or assistance, you can rely on their trusted ECN brokers that are always available to guide their clients and their multilingual customer service representatives to ensure their clients’ satisfaction. Make sure to read online trading reviews and feedback before trusting any kind of broker. Register an account now and make your first step towards becoming a successful trader!