As humans, we are not free from mistakes. The beginner may commit so many wrongdoings without having any proper knowledge about the marketplace, which can compel him to lose all the money in the end. In Forex trading, a beginner may become a victim of so many losses due to unknown trading mistakes. Today, we will discuss some of the daily mistakes that a trader in Hong Kong should avoid to achieve success.
List of mistakes
Not having a plan
Beginners rush to buy financial instruments without having a plan from the beginning, and as they do not build a strategy, it is obvious that they will drop out of the market eventually. Success is not a thing that may come from erratic behavior, and an investor may get success in business when he makes a comprehensive plan based on rational decisions.
Without keeping a proper plan means they can take his defeat to greed and excitement when important steps must be taken. Study shows that 95% of traders leave the market at the beginning as they do not maintain proper planning to develop their skills. Some newbies even make a trading plan, but they do not have the patience to stay focused, and because of this, in the end, their strategy does not become fruitful.
Not to cut the loss
Amateurs do not bother to keep a trading plan by setting a stop-loss order right after their financial instrument, and this causes a huge loss later as their trade does not stop automatically in a sudden downtrend of the market. Even there are some greenhorns who continuously change the position point of the stop-loss order, and this activity makes their account zero because hoping for the uptrend will not always help as the market is volatile, and one does not know what will happen when. A stop-loss order should be set very close to the trading point so that after taking a certain amount of loss trade, it can be closed automatically.
Never trade with the expectation that you will earn money from losing trades. Learn more about the stocks so that you can trade with logic. Not having proper logic is one of the key reasons people blow up their accounts.
Without setting a take profit point
A take profit point should be set just above moving average so that after taking a certain amount of profit, the financial instrument that we had bought can be closed automatically. But because of greed, we do not want to set a stop profit order thinking it will make a huge amount of profit. But, we find a different result by making a double loss, let alone making any profit. An investor should keep in mind that they should not set the take profit point in a higher position taking a wider space because if they do that, then they can face a greater amount of loss in a bearish market because setting up a stop profit point in a higher position take the same amount of loss in a bearish trend.
Most of the businessmen do not keep a trading journal every day, but it would be helpful for them to analyze the historical data later for a better business strategy. Experts maintain trading journal and note down their steps and actions so that they can analyze later which strategy worked well and which one failed.
To be a successful investor, we must find out the mistakes that we make and try to keep our emotional balance. Trading is actually not as easy as we think, and without identifying the wrong thing, we cannot find a handsome profit and for that reason, experts suggest that new investors should be free from cognitive biases so that they can make their decisions in the right way.