It seems so easy to trade. Since prices can only go up or down, traders just have to pick the right direction and wait for the money to come in, right? Well, that is not always the case. Let’s explore every nook and cranny of the common mistakes traders do with Indicator Vault!
Table of Contents
1. Is it okay to make mistakes when trading?
Big ideas without preparation may lead to shocks in trading. When traders aren’t well-prepared, they don’t realize that making mistakes is a part of learning how to trade and can even help a person become a successful trader.
There is no trader who hasn’t made some blunders. Common trading blunders are made by everyone, from those who are brand new to the markets to those who have been trading for decades.
Some of these errors cost more than others. And it’s true that some mistakes are hard to forgive. And for some traders, ignoring a mistake and making it over and over again can mean the difference between making money and losing it.
2. 3 common mistakes traders do
A. Trading without a trading plan
Having a trading strategy is essential for each trader. If you don’t have a plan for trading, now is the time to start thinking about it.
Could it be that you need a supplement to your usual income?
Do you want to make a career out of tracking the stock market?
Is it just a challenge they want to take on?
Whatever the motivation, a person’s trading behavior will be influenced by their ambitions.
The first step for every trader is to determine their ultimate goal, and then figure out how to achieve it. It’s important to evaluate the time that can be devoted to trading, the sorts of trades that can be pursued (such as large volume, low profit transactions), and the degree of knowledge that can be attained without spending too much time on education.
B. Emotional trading
We’ve all had times when things are going well and we feel like we can’t do anything wrong. When traders apply this to trading, it’s usually after a string of successful trades that make them feel like they’ve got it down. But all good runs end at some point, and it’s important to remember this because, in the end, it’s money at stake.
It’s good to be excited about trading and to have confidence, but don’t let your emotions control your trading and force you into positions you wouldn’t normally take.
Try not to trade based on how you feel. Before you make a trade, take a half-step back and try to look at it from an outsider’s point of view. Does it fit with the way you trade? Are you doing it because you know it’s right or because you just feel like it? What would you do if the trade didn’t go your way?
Create a set of warning signs that will keep you from getting too emotionally involved.
C. Not using a stop-loss order
Without a stop-loss level, trading is like driving without brakes. It is too risky.
But even though this is a useful tool, many traders still don’t use it. And most of the time, it leads to painful losses. Losses that were not necessary and could have been avoided.
If you use a stop-loss level correctly, you can make sure you don’t lose too much.
You will be in a better position if you use this as part of your risk management, whether you want to set a “hard” stop-loss as soon as you enter a trade or have a “soft” stop-loss level in front of you as you trade. Just keep in mind that soft stop-loss levels are better for experienced traders who know how these markets work.
Here’s a simple way to stop loss and earn profit. Introducing to you: Candle Meter indicator for Tradingview
This indicator analyzes the strength of every candle & tells you whether the bulls or the bears are winning… so you can determine with confidence where the market will go
Here is some of the benefits it bring to you
- Outline the change of candle strength over time.
- Accurately identify the trend from the start.
- React to market changes VERY FAST.
- EASY trade pullbacks successfully.
Still not convinced? Click here to see it in action
3. The bottom line
Trading is always a dangerous business, but there are steps you can take to reduce the likelihood of losing money in the process.
If you can avoid the traps and mistakes listed above when trading Forex, you should be able to trade in a more organized way that helps you reach your trading goals.
Thanks for your reading. You can find out more articles in our blog: Top 4 Candlestick Reversal Patterns For A Successful Trade and Everything You Need To Know About Order Block
If you’re looking for some knowledge-trading articles or an update on our newest indicators, you can find them here:
What do you think? Do you know other mistakes to avoid?
Comment below to share your idea!
Find this article useful? Share this blog with your friends on social media!