Trading the financial instrument is one of the most complex tasks in the world. Every single day the number of retail traders in the financial market is increasing at an exponential rate due to its extreme level of profit potential. If you look at the professionalSingaporean traders then you will notice that most of them are making a decent profit in every single month. But in order to make a consistent profit, you must have a very clear understanding of the basic of the forex market. If you are new to the industry then try to develop a reading habit and learn from the mistakes of other traders. In this article, we will discuss why most novice traders fail to make money in the online trading world.
This is the number one reason for which 95 percent of the traders fails in the forex market. If you look at the professional traders then you will notice that every single one of them has spent a huge amount of time in mastering the art of trading. As a new trader, you should have a very clear understanding of the forex market. If you execute random trades just like the rookie traders then chances are very high that you lose money in the forex market.
Overtrading is very common among the novice traders. Most of them think that money is flying in the market and all they need to do is to execute the orders. If you are new to this industry then make sure that you are not doing this same mistake. AS a full-time trader you should always focus on quality trade execution in the forex trading industry. Always remember that single high-quality trade is better than thousands of poor trade setups in your trading platform.
Trading is all about managing the risk. If you want to succeed in this industry then you need to learn to manage risk. Most of the novice traders in the forex market execute high lot size trades in the market and thus they lose a huge amount of money in single trade. The expert always suggests the novice traders not to risk more than 2percent of their account capital. So if you think that trading is the perfect profession for you than learning to embrace the losing orders and never risk more than 2 percent of your account capital.
There is a well-known proverb in the forex market that the trend is your friend. The expert traders at Saxo always follow this proverb and execute their trades in favor of the long-term prevailing trend in the market. If you are new to this forex market than learn the art of fundamental analysis since it will allow you to measure the strength of the prevailing trend. No matter how reliable the trading signal has never executed any trade against the trend.
Emotions can be extremely dangerous if not controlled properly. Most of the novice traders get emotional and execute high lot size trades after they face few consecutive losses. But if you look at the professional traders than you will see that they never trade the market based on their emotion. They always use rational logic to find the best possible trades and based on that they make a profit. It’s true that at the initial stage it will be hard for you to accept the loss but your need to adapt this losing trades in the market.