All Newbie Traders To Preserve Your Finances, Stay Away From These Blunders




It all comes down to making the correct choice at the appropriate time to predict the direction and timing of prices while trading the markets. However, some resources and methods might assist novice traders in “not losing the money,” which ought to be everyone’s top priority. 

In order to avoid losing money in the first year or two, you must determine your target before you start generating income. 

You won’t be able to go on to your second aim, which is to make money unless you’ve accomplished that. Therefore, instead of asking what pros do to generate money, ask what those who are losing money are doing to learn from their mistakes.

Position Sizing

We can thus understand the origin of “too huge position size” if we consider the first problem mentioned above. They have modest accounts and won’t trade micro quantities to swing a few cents up and down, not because they want to take on a lot of risks. 

I understand why risk on a small account is more likely to be between 5 and 10% rather than 2% for every deal. Unfortunately, things might soon spiral out of control.

Balance Size

The money in your account is the first area of concern. 90% of traders are losing money, not because they lack trading skills but rather because their trading accounts are too tiny, even though they want to generate significant gains to pay for their living expenses. 

Many brokers are running promotions where they will open a trade account for 500 EUR or less. Brokers know that there are many retail traders with 500 euros in their pockets, but few with trading accounts with 20,000 euros.

Trade Consistent Patterns Across Several Marketplaces

What do new traders do when they enter the trading industry? They open the EURUSD or GBPUSD charts and limit their trading to these two pairings. You must refrain from trading while continuously concentrating on a single instrument. 

Continuously trading EURUSD in and out won’t work well since market circumstances fluctuate. It would be best if you diversified the assets in your portfolio because the foreign exchange market fluctuates.

Avoid 100% Sure Use Of Indicators Surely

Only partially rely on machines or signs. Since RSI, MACD, and other similar indicators are built from prices, how can they then tell you which way things will move from here without first requiring market prices? 

They can be helpful anyway, but only if you want to corroborate your assessment of the market’s movement. The same is true with robots; while some may perform admirably, human judgment must still be used to prevent some undesirable market signals.

Be Tolerant With Early Entries

I wait to sell right away if I spot opposition where I want to sell. I typically observe the market reaction in that area, and if I keep lower reactions, this is my confirmation, and I follow the trend. I want the market first to validate my prejudice!

About the author, Awais Rasheed

Leave a Reply

Your email address will not be published. Required fields are marked

{"email":"Email address invalid","url":"Website address invalid","required":"Required field missing"}