Common Blunders of Investors and Traders

Common Blunders of Investors and Traders

Trading is the riskiest profession in the world and it is a place where you will lose some money eventually. This is quite natural. You can also consider making mistakes as a learning process if you learn from them. But you should not allow mistakes to happen repeatedly, no matter what the reason.  Rather than you need to prepare yourself in such a way that you will not make any bad decisions while trading. In the following article, we are going to talk about some common investors and traders’ mistakes they make

Trading with no plan

Many traders trade without any plan and because of that, most of them lose their account and often few traders win 60% of theirs trade but keep making losses. This thing happens only because of not having a proper plan. Having a trading plan helps you to reach your goal in a well-defined way and as a result, traders do not lose their track. Without a trading plan, a trader is like going toward an unknown place without a map of that place. Most of the new traders do not follow a strict plan and often they try to do whatever they like although they have a valid plan. These are investors and traders’ mistakes.

Chasing after result

Most traders and investors think about having a great return from their trades or investment rather than improving their analyzing and investment skills. When you are a trader you must not think about how much you are going to earn from trade instead of how accurate is his analysis. Because if your analysis is written, you will earn profit and no one can stop it. If you put more emphasis on earning a certain amount of profit, you will miss some information while trading. The same goes for the investors. They need to learn about the sector where is going to invest his money rather than just focusing on how much return he will get.  But don’t get too biased about the results. Visit home.saxo to learn more about a professional approach in the CFD trading business.

READ  Top 5 Real Estate Marketing Tips you should know in 2020

Not following proper risk management

When you are thinking about investing in trading and starting to trade, you must need to fix an amount from your trading capital that you are ready to lose. When you fix an amount that you are ready to lose, you have to calculate how much risk you are going to take per trade. Without taking the risk you will not make money from trading but you can reduce the risk by following a proper risk management plan. Often traders in the Mena region don’t follow any type of risk management rules and as a result, no matter what their win rate, they always keep losing money. 

Not using a stop-loss order

A stop-loss order is a certain type of order which helps a trader not to lose all his money if the market goes against him. Trading is a market where the market is so volatile that it can go against you in just the blink of an eye and as a result, you can blow your account anytime. So whenever you open a position we suggest every trader use stop loss with a proper risk-reward ratio so that if the market ever goes against you, you might reduce your loss because whenever the market hits the stop loss level, the market will automatically close the trade. Overconfident traders often do not use stop-loss orders and face unwanted consequences. 

Letting loss grow

Often traders have the intention of letting his losses grow because he has a belief that the market will go in his favor art some point which will give him his potential profit. Sometimes a trader might open 3 positions in which 2 of them are in profit and 1 making a loss. Overall he is in profit. But if he let his losing trade to grow, he will make a loss overall. Traders often doesn’t do this. Thus, a trader can make a loss whilst having a higher percentage of winning trades. 

So these are the common investors and traders’ mistakes that they make and we hope you will not make these types of mistakes.  

READ  South African Property: Rent or Buy?

Leave a Reply

Your email address will not be published. Required fields are marked *