Do you think it is wise to learn from your own mistake? But what if you have an option to learn from others’ mistakes? If you were given both the choices, what will you select? The successful traders in Singapore did not want to sacrifice their time to make mistakes and then, learn from it. Instead, they analyzed the common mistakes made by traders who were before them. By analyzing others’ mistakes, you can correct your own. This is a wise thing to do. As a beginner, you should also follow this because it helps to allocate more time in trading. You don’t have to waste your precious time to make a mistake and then, learn from it. Therefore, here are some of the top mistakes that you can correct when you are trading.
Lack of preparation
If you are riding a bicycle for the first time, what would you do? Would you ride on the road or practice in your backyard? If you are intelligent, you will practice in your backyard, before riding on the road. When you are doing something for the first time, it is better to practice because it helps to understand the method. When you practice riding, you will get hurt. But think about the consequences if you practice on the road?
In this analogy, the backyard is described by the demo account, whereas the main road is the live account. Most beginners feel stupid when they are required to trade the demo account. But the truth is the time and effort you insert for your demo account is the practice session. It is not something worthless. Instead, it is essential. You may say that it doesn’t offer the feeling that a live account does. But the truth is you will understand the background and the overall picture of the live account. This is also important for a beginner even though the feelings can’t be created. Therefore, lack of preparation is one of the common mistakes that you should avoid.
When you can make the best out of something, you should. Of course, it is logical. But when you are dealing with Forex trading, it doesn’t happen that way. The market will not work as you want so even if you feel that you can get the best out of the market, it will not happen. Some traders try to trade as much as possible so that they can make higher profits. Unfortunately, overtrading in Forex will lead to losses than profits. Only if you have due diligence, you will be able to go forward in trading. The overtrading syndrome will wash away your capital. Therefore you need to trade according to a plan!
Do you know the mistake that beginners often make? They don’t think of stop-loss as something important. But this is high time for you to accept that stop loss is essential if you want to protect your trading account from wiping out. By placing the stop-loss, you can protect yourself from facing a huge loss, but to make it happen, you should know the ways to do it.
If you don’t keep things simple, you are not going to understand the Forex market. Just like that, if you don’t make an effort to learn the mistakes, you are going to repeat the same mistake. Therefore, don’t underestimate the power of learning, even though many traders might trick you into trading the live account directly.