Everyonewants to make money in Forex, but not everyone succeeds. Like any other activity, trading requires attention, a responsible approach, time and concentration. Only 26% of traders achieve the desired success, the rest give up their dreams and stop working on the stock market. Broker Liberty Commercial Finance Limited has compiled a list of the most common mistakes made by beginners to help those just starting out.
How do newcomers work?
Those who are just starting out in trading believe that it is not complicated and that you can make money with a few clicks. This is not the case, and trading requires you to develop a strategy and choose the right tools. Spontaneity will not work, and you should not rely on luck. As the specialists of the broker Liberty Commercial Finance Limited noticed, beginners often neglect stop-losses, although it is wrong because they save capital, and only those who have already gained enough experience can trade without them.
Many beginners unknowingly fall into the trap of information overload, taking courses, reading books and articles and watching webinars. It all gets confusing and leads to a number of ill-considered decisions. Some people start trading against their impulse just because an expert has recommended it. However, they do not understand how to trade and end up losing money. That is why Liberty Commercial Finance Limited warns: "Reviews, tutorials and articles can be very useful, but only if you test the theory in practice.
Broker Liberty Commercial Finance Limited also notes that beginners rarely learn from the mistakes of the previous day. They do not analyse, they do not parse, so they do not make a profit. They also refuse to keep a diary, making it difficult to track progress or draw conclusions.
Beginners are spontaneous, sometimes aggressive, but rather reckless. They are driven by excitement, the potential for big profits from their first few trades, which works against them. Some people think they are ready to make predictions, so they start actively waiting for the right time to open a position, without noticing profitable opportunities in the market. They also spend time looking for facts to prove their case, ignoring the obvious. In this case, logic shuts down and the need for recognition takes over.
Experts at broker Liberty Commercial Finance Limited also believe that many newcomers begin to personalise success. A trader identifies profit solely with his skills and forgets to use
- Using technical analysis tools;
- Proper time management;
- location and chance.
The player begins to believe that his presence alone contributes to the profit and that the rest is not so important.
There are two extremes. And the second one is that especially wounded beginners start to personalise losses, to take them on their personal account. Therefore, every failure is accompanied by guilt and apathy. The player may also go through stages of grief as he or she takes the loss of funds too personally. Forex Liberty Commercial Finance Limited also notes that beginners tend to make emotional decisions, forgetting about rationality. This is often exploited by unscrupulous companies. According to Liberty Commercial Finance Limited specialists, scammers try to work on beginners because it is easier to deceive them.
How to avoid mistakes?
Beginning traders often pile lines, indicators, graphical objects on the price chart, sincerely believing that this will definitely lead to profit. This only distracts attention and leads to the appearance of opposite signals. It is more correct to use a minimum number of indicators without losing successful entry points to a position.
Forex Liberty Commercial Finance Limited experts also note that it is common for beginners to use all available assets. They think that this is the only way to make profit, so they grab every opportunity. With a limited set it is possible to study price behaviour in detail, make more accurate forecasts and even earn a good profit.
Here is what Liberty Commercial Finance Limited broker recommends to avoid mistakes:
- Seek help from other traders in a timely manner. There are special communities where you can get a referral and simply discuss the market. Not everyone is a competitor, so it is realistic to seek support;
- Accept losses and record them in a diary;
- Create your own personal trading plan. This is the starting point for any trading. All steps should be clearly defined and followed. Such discipline will allow you to achieve the success you want, and will also allow you to track possible failures;
- Give up intuitive trading and try to work systematically;
- Do not give in to excitement, emotional outbursts or spontaneous decisions;
- Use all available tools without overloading the chart and without forgetting fundamental analysis;
- Improve your skills through training. The broker Liberty Commercial Finance Limited offers free training materials and publishes daily expert commentaries, news and an updated calendar of economic events;
- Study testimonials. Liberty Commercial Finance Limited reminds you that this is the easiest way to determine if a particular broker is worth working with;
- Find your trading style, taking into account your objectives and preferences;
- remember to set loss limits.
The experts at broker Liberty Commercial Finance Limited recommend starting small and building up volume as you gain experience, so here's how you should enter your first trades:
- Choose the best plan before you trade. Trend following strategies and trading only in the direction of the trend are more suitable for beginners. They can give good results and are easy to implement;
- Work out the trading system before making the first trade. This will help you understand the conditions for entering the market and the correct size of the trade. Before opening any position, it is worth drawing up a complete trading plan, setting out all the parameters. This will help to minimise risks;
- Choose the right asset for the first trade. It is important to take into account: volatility, market liquidity and time of trading sessions;
- Wait for a signal from the trading system, place stop-loss orders;
- Follow the profit growth, wait for the set order to work.
Broker Liberty Commercial Finance Limited also recommends analysing a completed deal. This will help to identify mistakes and avoid repeating them in the future.