From the outside, trading and forex looks like a pretty green field, full of people getting rich, and it's all going great. But when we take a closer look and start trading on our own, we find that there are a number of issues that a lot of traders encounter on a daily basis. It is easy to fall into their traps, but there are ways to avoid them or at least reduce the effects they have on our operations and trading accounts. Today we are going to look at some of the most common issues that many traders encounter.
1) A lack of training
Anyone who trades without knowledge and experience can easily blow up an account, or even multiple accounts, if they don't learn from their experiences. Trading without the required knowledge and without having a clue what you are doing is a disaster, but it is something that many people do and will continue to do. When we trade without having acquired the necessary knowledge, we are only guessing what the markets might do. In fact, it could even be compared to a simple game of chance.
If you plan on trading, you need to put in the time and effort to learn the basics. Learn about different strategies, learn how to manage risk, and find out how markets move and are affected by things like news. If you do these basic exercises, you will have a much better understanding of what you are doing, which will help you develop better trading ability and also protect your accounts and capital from common stupid mistakes among traders .
2) Use emotions
We all have emotions. These are powerful things, they can make us happy, sad, or even do stupid things, and when we trade without our emotions, we often do just that, stupid things. Two of the most powerful yet damaging emotions we can have when trading are greed and overconfidence. They often come from different events, from greed when we lose and from overconfidence when we profit. However, they both have the same effect on us, as they cause us to abandon our trading strategies and risk management and then make trades that we know we shouldn't. Par exemple,
If we get to a point where we can feel our emotions rising or even taking over, it's important that we do something about it. It can be as simple as walking away, taking a step back from your trading terminal, going out, eating something, doing something unrelated to trading. It's the best way to clear your mind. You can even try talking to someone about it, often you can become more rational by talking to someone else rather than just thinking about it yourself. Once you clear your mind, you'll come back refreshed, with a clear view of what's going on,
New events occur. There are economic calendars which tell you about upcoming events and the potential impact they might have on the markets and currencies they might affect. What they don't tell you, though, is the sneaky news that isn't on there. They appear out of nowhere, maybe something has just been developed or announced or there is a natural disaster somewhere in the world. These kinds of events cannot be predicted, they cannot be written into any economic calendar, and when they do occur, they often cause markets to jump in very unpredictable ways. They can be very painful, because you could have simply done a lot of analysis, put together the perfect trade, and then BANG, a new unknown event appears and the markets go up.fly in the wrong direction. We have all experienced this and most traders will do the same in the future, there is nothing we can do but manage the positions that are affected.
4) Unpredictable results
We mentioned news events just above, but there is another side, even news events from economic calendars can play with us. In the event of a positive result, the expected movement in the markets would be upwards. However, there are times when the markets just don't see what expected results might yield. Even things like the US non-farm payroll news , which is historically one of the most influential ones in the markets, can get a little weird. There were times when it was very positive, but the markets went down. For those who follow the news, a buy w