Apr 23rd, in Forex Trading, How To Trade Forex, by niatrading
It is true that the more you practice, the better you become with what you do. However ,in trading, the more you trade, the more likely you are going to lose. If we believe that 90% of traders are losers, doesn’t it make sense that the more they trade the less loses they would make?
1. Trader over-confident on their past winning trades. Thinking the winning luck will go on forever. One mistake in a trade can wipe out your previous profits or even your account capital.
2. No money management. Use all money in account to trade for quick high profit. To avoid one silly mistake that kill you all, one must learn to use only 1 - 5% of their available capital. At least you still have 95% left when your trade fails.
3. Fear of loss. Do not cut loss and waiting miracles to happen. This incident happens to me. On friday near to closing hours, my losing position was only 20% down and so I decide to carry over weekend to hope things will turn around. Unfortunately, by Monday morning my position was 80% down.
Think long term, cut loss fast and there is always opportunities to recover your loss. If you made too serious loss, then it is harder to recover.
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