As a newcomer, this is common that the trading field is unknown to you. If you want to succeed, you have to understand the market. Your knowledge will help you to avoid making mistakes. Several types of mistakes that fresher do are discussed here so that they can overcome this.
Over Trading
New traders in Singapore try to trade in high frequency. Here, the risk to reward ratio is high. They think that if they do more trade, they will able to make more profits. In this case, they forget about their capital. They take more leverage and do more trade. On the other hand, professional traders do not trade more. They trade according to their plan. Firstly, you need to make a plan and include how much trade you will do in a day. Stick to your plan. Try to trade in a higher time frame instead of a lower time frame. It will help you to reduce your cost.
Lack of Proper Knowledge
If you do not know about the market, you cannot able to execute your trade properly. Some traders think that they can learn through trading but this is tough. Before swimming, you need to learn how to swim. Similarly, before trading, you have to be prepared. There are different types of elements you need to know. The use of indicators and tools should be known by you. Try to read books and journals. You can learn through demo account how to trade properly. Attend seminars if you want to see live discussion. By sitting at home, you can easily learn about commodity market. Many online sites are giving free resources for traders to gain knowledge. When you buy commodities online, use your knowledge to take calculative decision. Never become biased with trading or focus on the emotional aspects.
Lack of Risk Management Skill
As a trader, you need to know how to control risk. If you cannot able to manage your risk, you cannot able to be a successful trader. Sometimes newcomers do not set a stop-loss for their trade. This can be a cause of great loss. You have to decide how much loss you can handle instead of how much reward. Your plan should be included stop-loss. This is not possible for you to always observe the market. The market can be changed within a second. So, if you set stop-loss for your trade, this can reduce your cost. Do not change your stop-loss repeatedly, wait for some time. A large loss can be stopped you at the middle path. So try to secure your capital.
Not keeping Error-Free Records
You have to learn from your previous trade. For this, try to maintain an error-free record. This is not possible for you to make always profits. Sometimes you see a losing streak. If you do not want to see a losing streak, just keep your records properly. It will help you to analyze your mistakes that you have made. Try to find the solutions to your mistakes. If you think that you need to make some changes to your plan, then, do it. Most of the new traders do not keep their records so that they do not get the opportunity to find out their errors.
Recency bias
As a trader, you might be frustrated because of facing a losing streak. Ups and downs are common in Forex market. You should remember that you cannot control this. This is totally unpredictable. You can control your-self. Sometimes, the fresher is influenced by their recent failure and success. One failure cannot decide your career in the trading field. Similarly, one success cannot decide your longevity in the market. Do not be overconfident, and be an over-thinker. Both of these are bad for your trading life. Analyze your mistakes behind your failure. Try to solve this. Decide logically, not emotionally.
