The 10 most common rookie mistakes in the marketplace

As a rule, newcomers come to the market inspired by the fact that in a short period of time, having a relatively small starting sum, it is possible to get an impressive profit. In his dreams, the beginner already imagines himself almost a millionaire, drawing rainbow pictures of the future and distributing a non-existent income. As a rule, most beginners make the same mistakes, eventually losing their money and becoming disappointed in trading on the currency market. Is it possible to avoid such a fate? Of course! Let's analyze the most common ones rookie mistakes on .

1 mistake: lack of experience

Trading in the foreign exchange market, like any other business, needs to be learned. However, the main difference from other businesses is the risk of your own money. The method of trial and error is not the best way to acquire and develop skills as a trader.

In order to avoid such risks, all brokers provide newcomers with a demo account for trading. Trading on demo accountor in trader's slang - demo, will allow a beginner to understand the mechanisms of influence of market factors on prices, to put into practice theoretical knowledge on technical analysis, to develop his own or test a borrowed strategy.

A demo account provides an effective opportunity to acquire and develop the skills necessary for successful trading on the market, while risking only virtual money. Nevertheless, you should not turn the use of a demo account into a game based on the principle "I've run out of money - no problem, I'll make a new one". Only the attitude to virtual money, as to real money, will help to gain the necessary experience. Sometimes, if a trader can't stop thinking about virtual money, ForTrader.org recommends replacing it with a demo account. cent or micro accountto have something to lose.

2 mistake: unreasonable expectations of wealth

First of all, you should immediately abandon thoughts of getting rich quick. This approach is often provoked by some brokers. Of course, many traders earn on , for some it is the main form of income. But it does not come at once. Years of hard work are behind stable profitable trading.

If you're going to make a profit - set yourself up for a substantial time and mental cost.

3 mistake: lack of a solid trading plan

The most common mistake of a beginner is the absence of a trading plan that provides for specific actions in any situation. Often, beginners leave this idea and with time start entering the market at random. Rearranging chess pieces just like that, without a certain meaning, it is impossible to win at chess. Similarly, it is impossible to make a stable profit without a clear trading plan.

Planning on can be conditionally called two-level. At the first level, the trader determines currency pairs to trade, leverage, realistic profitability targets, trading style and so on.

The second level of the plan provides definition of parameters of each deal: conditions for market entry, entry point, level of stop loss and take profit.

4 mistake: lack of discipline

Any plan has value only if it is strictly executed. Patience and discipline are indispensable qualities of a successful trader.

Having a clear plan helps a trader to keep his emotions under control. The market is a very dynamic market, where the situation can change in a few seconds, causing the trader a storm of emotions, because you must agree, it is hard to see how a deal that was profitable just now becomes unprofitable in the blink of an eye. And it is the discipline that will help to keep the trader from rash actions caused by the emotional tide.

Absolutely, volatility The market sometimes presents such surprises that no plan can foresee. In this case, it is best to wait out such moments outside the market, observing it from the side, but in no case giving in to fleeting emotions.

Mistake 5: failure to use stop loss and take profit orders

An open order without a clear vision of the market is a direct threat to the entire deposit. After all, getting a loss on a deal, not every beginner will be able to close it, because a person is so organized that he sees only what he wants. In every price fluctuation a beginner sees signs of a close price reversal, when the loss on the deal will start to decrease. Such over-sitting of losses sooner or later, but unambiguously always leads to loss of deposit.

This will not happen if a trader uses a stop-loss order, thus limiting his possible losses and being able to plan his further actions in case he gets one.

The same is true for the warrant Take Profit. You should not be greedy - you will not make all the money. Having determined the level at which to fix the profit, the trader again eliminates the emotional component from his actions. Yes, it is possible to regret more profit. But it is easier to do this when you already have a fixed profit on your deposit, rather than some of its residuals fixed manually.

6 mistake: excessive leverage

Leverage - is a tool that can become both the reason of getting a good profit with a rather insignificant investment, and getting a solid loss in case of wrong choice of the trading position volume.

7 mistake: overabundance of open positions

A human being is not a machine capable of making millions of transactions per second. The presence of a large number of open transactions on a trading account puts a trader under enormous moral pressure, not to mention the load on the deposit itself - one should not forget about leverage.

8 mistake: loss overstaying

What is the difference between an experienced trader and a beginner? For a beginner, a loss is a tragedy comparable to the end of the world, while for an experienced trader it is just an integral part of his work.

A disciplined trader, who follows his trading plan, will accept a loss limited by stop-loss on his account, thus saving the main part of the deposit, with the possibility to cover it with other deals. A beginner, as a rule, "hopes and believes", sitting out the loss, which, as mentioned above, leads to a complete loss of money.

9 mistake: spread impact on profit

This mistake concerns beginners who opted for floating accounts spread. It should be clearly understood - during the day the spread on currency pairs often fluctuates, which can turn a profitable trade into a losing one.

On floating spread accounts, it is important to remember that the spread widens in thin market conditions and before the release of important economic news - interest rate decisions or indicators comparable to NonFarmPayrolls.

10 mistake: greed and gambling

They say that beginners are lucky, and this is no exception. For example, a beginner who has increased his demo account from 5 thousand dollars to 15 thousand dollars due to one or two successful trades, shaking hands bring money to the broker in anticipation of buying a new car, a four-storey mansion and a trip to Hawaii no later than next Wednesday. The market severely punishes such self-confidence, taking away all the money from such beginners. It is worth remembering that the currency market is not a casino, there is no room for greed and excitement. Only patience, planning and cold calculation, and not the desire to get "everything as soon as possible" are the key to stable profitable trading.

The above-mentioned mistakes are the most common among novice traders and have been verified by the experience of many generations. A fool learns from his mistakes, and a smart person learns from other people's mistakes. Is it worth stepping on the rake, if there are time-tested ways to bypass them and proven by more than one generation of traders? Especially since each such "rake hit" is expressed in tangible monetary losses.