Common Mistakes by Traders

Another important principle in life, is to learn from other people’s mistakes. Never wait to learn from your own mistakes… Those that have gone this part ahead of you would tell you this is what people have done which didn’t yield positive results and hence u should modify your own actions.

Some of these mistakes are:

Not having a trading plan.
Paper trading for too long. Paper trading is same as Demo Trading. Even though it’s good to demo trade, but don’t dwell in the fantasy world for too long. Get into the real market and trade and analyze with your emotions on the line. That’s makes you stronger. Dwelling in the fantasy world would make you feel relaxed and you won’t learn because you would always say to yourself “it’s paper money”
Next is not using a Stop loss – Always remember to put it in all your trades. No matter how good, you might have analysed the market, you may not know when a major news would be released and it could change the direction of the market. (that’s why it’s always good to look at the Economic calendar before the beginning of every week). By setting your Stop-loss, no matter the news whether it’s against your direction, you would be protected.
Next is opening so many Trades. You would see someone open GBPUSD, EURUSD, USDJPY, USDCHF, AUDUSD, AUDCAD, EURJPY, GBPJPY, EURCAD, EURGBP, NZDUSD. Just one person! How can you monitor all these trades? It all comes down to GREED because you want to grab every single pip in the market. Since its $5.3 Trillion dollars liquid cap, you want to go home with as half of the market volume. Never open so many trades that you can’t monitor. I always limit myself to trading gold (XAUUSD). It’s better to open multiple positions on one trade (i.e on one currency pair) and monitor it judiciously, than to open multiple currency pairs and distract your attention.
The last but not the least (as we would address others as we encounter them within the course of the Training) is anticipating how the News would affect the market. Remember we talked about Fundamental Analysis. We mentioned that Fundamental Analysis is trading the market using the News. MT4 shows you important News releases in its News section. You can also use forexfactory.com, dailyfx.com, investing.com, myfxbook.com. On these sites, you would see important releases for the week. Now before, important major news events like Nonfarm Pay roll which is coming up this Friday, Forex analysts used to release, what we call forecasts. These forecasts tend to come in the form of figures. When many Forex analysts has the same value, that value arrived upon by majority of Forex analysts is called consensus. This consensus are published in various news platforms before the main News is released by 8:30am.EST (IE 12:30 pm GMT) Now this is just a forecast, not the real value. So many traders, would now go ahead and start making trading decisions with those forecasts because they want to get in early and make huge profits. Thats a huge mistake to make. Always wait till the main News is released before riding the trend created by the news. We would learn various strategies on how to trade Nonfarm payroll soon. These are the common mistakes made by traders. It’s always important to note them down and try as much as possible to avoid them during your Forex journey