Trade has now become the business of most of the people in this increasing world of technology. People who have an extreme desire to become rich as soon as possible are mostly indulged with the trading technique of business, but it is always advisable to think, plan and research before putting yourself in anything or in any business. Generally, most people have this habit of entering something without doing proper market research and analysis of that particular thing or business and trading, due to their greed, overconfidence, and enthusiasm. No doubt, Trading can make you rich in very less time but only those people can make success in it, who have proper and accurate knowledge of how to handle it, its growth rate, its strategy and plan, and also about the mistakes of it, due to which one can lose all its capital.
First one should make this clear in their mind that Trading is a different thing from Investing. Investing means buying and holding something for a long period, but Trading is just a short term game in which either you win or lose it. So without doing any further delay lets look at the mistakes that should be strictly avoided, if you are doing Trading.
1) No Planning Before Trading
There's a popular saying in the trading world is, "Trade is simple, but it's not that easy!!". It's very easy to access the data, price chart and enter a trade, etc with increasing technology and internet world. but it is not that simple as it looks, its not easy to make money by Trading without knowing this technique. Trading demands very much patience and self-discipline from you. Trading generally is a game of probability, you can increase your probability of winning in it when you have a full-proof plan. With planning and a sharp strategy, you'll acquire confidence and stay for a long time in the trading market. You'll make impulsive trade without knowing its rule and planning, and your chances of winning are very uncertain.
2) Doing Impulsive Trade
Impulsive trade is nothing but trade with a lack of control over your emotions. With the flow of your emotions, you make impulsive decisions, which is not a good thing in trade. What most of the traders generally do is, they get easily influenced by news or suggestions, and they take trade decisions when they feel good. The emotions that trigger the most are:- Fear, Obsession, Boredom, Greed, and Frustration. Identify and capture these emotions and practicing self-discipline can help you to overcome these emotions when doing trading.
3) Unaffordable Risk
Taking more risk than one can afford in trading is the mistake that most of the newbie traders often do. People who are new in the trading world has the tendency that they can take over risks and win every trade. This kind of mistake is very prevalent in the trade market and should be identified earlier otherwise it could lose you much in the long run.
4) Always Have A Stop Loss
In the Trade business, one should never become so confident about their prediction, so it's better to have a stop loss always. The Stop-loss technique is nothing but a full-proof strategy that helps you to come out from the trade market with less risk if your prediction goes wrong.
5) Use Of Multiple Strategies At One Time
The most simple your strategy, the better your results. Don't use multiple strategies at the same time to get confused. In reality, it is also not advisable in trading to use more than four indicators on the price chart. At first just keep a simple and single strategy and master over it, if it goes well for you then go ahead and continue with it.
So, friends, these are the most common and often mistakes that most of the traders practice while trading. Keep the advice that this article has given you when starting with the trading business, always follow a plan and strategy, never make impulsive decisions, and always have a backup plan to step back.
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