Over recent years, people have learned a lot about the trading industry. In fact, many rookie traders have changed their lifestyles just by trading the live asset. But becoming a successful trader in the United Kingdom is really hard. According to a recent study, more than 90% of retail traders are losing money. Even after having access to free education materials, why people are losing so much money? Most of the people start to trade the real market without having a clear goal. They simply consider the Forex market as a money-making machine and they execute a trade without analyzing the risk factors. For this very reason, people lose their entire investment.
Making mistakes in your trading profession is very normal. However, you need to avoid four common mistakes in trading or else you will blow up the trading account in no time. The four common mistakes are:
- Trading with false confidence
- Trading the market with a low-end broker
- Trading with a faulty strategy
- Breaking the rules
Trading with false confidence
Confidence has always been the key to success in any business. If you want to become a profitable trader, you must learn to trade the market with confidence. The rookie traders always trade the market with false confidence and lose a big portion of their investment. So, what is false confidence? False confidence is nothing but the reflection of a lack of knowledge. If you ask a new trader how they are doing, most of the time they will say, he is doing great. But their lifestyle will tell a different story. In reality, they are shy to admit the losing orders they are facing in the trading profession. You need to break this shyness and have the courage to admit your fault. Eventually, you can develop strong confidence to trade the real market.
Trading the market with the low-end broker
You must find the best options trading account or else you will have a tough time to make a profit from this market. The majority of the new traders are executing trades based on emotions. In fact, they search for the low-end broker who offers a high deposit bonus. But do you really think this is going to make them rich? The simple answer is no. You need to find a reliable broker like Saxo since it will help you to perform in-depth market analysis in a premium environment.
Trading with faulty strategy
The new traders don’t have the patience to back-test their trading strategy. They simply start to trade the real market with a faulty system and eventually they lose a big sum of money. As a professional trader, you need to understand the fact, trading is all about managing the risk factors in a precise way. To do so, you must have a balanced trading strategy. Unless you back-test your trading system in the demo environment, you should never trade the market with real money.
Break the rules
You might have the best trading system in the world, still, you will lose money. So, how to overcome this problem? You need to be a disciplined trader or else you will always break the rules. The moment you start breaking the rules in your trading strategy is the very moment you start losing money on a regular basis. Leading your dream life based on the trading profession is really hard. You have to rely on long term goals and trade the market with proper logic. You might have some very good trade setups, still, you should never risk any amount that you can’t afford to lose. Always remember, without following proper discipline in each trade, you are most likely to lose money in the long run. So, work hard and try to make a profit without having any greed or intention to break the rules.