Being a human beings, it is normal for us to make mistakes. But in trading, you must learn to limit your mistakes, or else you should never consider trading as your full-time profession. Many new traders have blown up their trading account due to some silly mistakes. So, to protect our capital from big losses, we must learn to avoid the most common mistakes in trading. Make sure you are not making the same mistakes repeatedly as it will put you into the line of fire.
In this post, we will share some amazing techniques by which you can avoid common mistakes. Go through this article as it is going to change your life and make you a great trader.
Develop a strong basic
Without having a strong understanding of the retail trading industry, it is very hard to make a consistent profit from this market. Traders usually start their careers without knowing much. They rely on emotions and aggressive actions for taking the trades. Eventually, they blow up a major portion of their account. On the contrary, elite and successful traders rely on strategic actions. To trade like them, you have to develop a strong basic. Start learning things from scratch so that you don’t have to deal with the big losses.
Take help from the experts
You may improve your trading skills significantly by taking help from the senior traders. Share your problem with the experts and they can give you a proper guideline. It might be tough at the initial stage but once you start following the advice from successful traders, things will start to make sense. At times you might get confused about your actions but once you start taking steps with confidence, everything will make sense. Moreover, you will develop the skills which will aid you to embrace the losing trades. Everything sounds very easy but in reality, it is very stressful.
And make sure you are seeking guidance only from the traders who have a proven track record in the financial industry. Never learn things from the inexperienced traders as it will make things much worse.
Trade the higher time frame
Successful traders always prefer higher time frame trading strategy. To them, higher time frame trading is more profitable as it allows them to identify the high risk to reward ratio trade signals. On the other hand, novice traders are trying to make money by taking trades in the lower time frame. Eventually, they have to deal with many losing trades. So, try to analyze the market data in a higher time frame so that you don’t have to deal with too many losing trades. Take your time and strategically evaluate the trade signals. Find the perfect trade setups by using a strategic action and trade with a premium broker. If possible, learn to analyze multiple time frames and use the price action confirmation signals. By studying different time frame data, you should be able to filter the false signals and thus your performance will improve significantly.
Higher time frame trading is extremely boring and you have to be passionate about your trade executions. At times you may think, lower time frame trading is more profitable. Though you will be getting more trading opportunities, still you should not rely on the lower time frame. A lower time frame always generates too many false signals which make things extremely hard for the retail traders. So, we strongly recommend that you take the trades in a higher time frame only as it will reduce the risk factors.
Trade with a premium broker
Smart traders in Norway always take trades using a professional trading account. If you are new to this market, we suggest you learn to find a perfect broker like Saxo Bank. Some of you might think choosing a premium broker doesn’t require any skill. But to find a good broker, you have to know about their functions. You may visit the official website of Saxo and explore their offered services. After spending few hours on their official website, you should have a basic idea about high-end brokers. Make sure the broker you are trading with has a strong record in offering financial services. Try to avoid new brokers in the market as they don’t have enough experience to offer a high-end service.
Very few traders know the proper way to select the right broker. Most people are driven by lucrative advertisements. But smart traders know that the high-end brokers will never set such lucrative traps. They always focus on finding good brokers based on in-depth research. So, to keep on the safe side of trading, you should know the proper way to select the right broker. Once you learn to ensure a professional trading environment, it will be an easy task to make a consistent profit as you will be using the advanced technical tools.
Avoid using too many indicators
Rookies always prefer to trade with indicators. They overload the chart with indicators and unnecessary tools. Eventually, it becomes hard to analyze the raw price movement. On the other hand, successful traders evaluate the trade signals by using the price action confirmation signals. By using the price action confirmation signal, they find the high-quality trade setup and find the best trading signals. Though it will be tough to learn about the different candlestick patterns, you can still learn these things by using a demo account. Take your time and learn about important market details so that you can execute trades without using too many tools.
Indicators should be considered as your helping tools. Though the indicators can help you to find high-quality trade signals, the use of too many tools can make things very hard. Learn the basic concepts of the most popular indicator and use it systematically. Study the key difference between the leading and lagging indicators so that you don’t have to deal with technical confusion while taking readings from multiple indicators.
Trade with the major trend
Novice traders love to trade the top and bottom. But taking trades against the existing trend is very risky. It can increase the risk factor significantly and make you an ultimate loser. To protect your capital from frequent losing trades, you need to learn the trend trading strategy. Once you become comfortable with the trend trading strategy, you should become more confident with your actions. Stop looking for the shortcut trading method and learn to ride the key trend in the market. So, how do we trade with the major trend? Well, you need to trade the higher time frame and give priority to the long-term established trend. Even if the market is trading at a record high, it doesn’t mean the price will drop without the influence of fundamental news.
Making mistakes as a novice trader is very common at trading. But if you carefully follow the tips mentioned in this article, you should be able to take strategic steps without making things complicated. Never be a greedy trader and always rely on the logical concepts of trading. Keep on studying the important market details as it will make things much easier while taking any decision.