by Perna Satpo
The new traders don’t understand why they are losing money. They are so much biased with the profit factor, they always look for bigger gains. Unlike novice traders, professional traders are always considering things in an organized way. They never push themselves too hard in the retail trading business since they know trading is all about precision. You might have a huge amount of money but still, you can’t execute low-quality trades.
Did you that know only 5% of the retail traders are making a consistent profit? Most of the naïve traders don’t even know the associated mistakes in trading. Read this article carefully since we will highlight the key mistakes associated with a new trading system.
Trading the smaller time frame
Scalping the market is very risky. If you intend to trade the lower time frame, you must have proper knowledge of technical and fundamental parameters. Most of the time, the new traders start trading the lower time frame based on an aggressive trading strategy. Eventually, they lose most of the trades. If you look at the experienced traders, it won’t take much time to understand why they are trading the daily and weekly time frame. In the higher time frame, you will get much more accurate data and it will be easy to find quality trade setups.
Trading against the major trend
You need to find the long term market trend to ensure quality trade execution. Sadly, very few traders know the proper way to find the long term market trend. Most of the novice traders are losing money since they are trading the market against the major trend. To make a living out of options trading profession, you must find the overall market trend and trade with low risk. Try to act like professional Aussie traders. You might have the best trade setup but if it’s against the major trend, ignore the trade.
Using a complicated trading method
The naïve traders love to use the complicated trading method. They consider it as the best solution to trade the live market. But in reality, a complex trading strategy makes things worse in real life. Try to learn about the support and resistance level so that you can execute high-quality trades. Focus on the price action confirmation signal and you will eventually get better at trading. Forget about the aggression and trade the market with proper discipline.
Use a demo account
Without back testing a trading strategy, you should never trade the real market. Most of the time the new traders jump into the retail trading business without having a verified strategy. Eventually, they blow up their trading account. But if you use a demo account and trade the market with Saxo, it won’t take much time to understand how this market works. Take advantage of the demo account and try to develop your skills. Forget about the complex trading system and try to craft a balanced strategy.
Trade with a high-risk-reward ratio
You can’t survive in the trading profession by trading the market with 1:1 risk-reward ratio. You have to find a 1:4+ risk-reward ratio to make things easier. Some of you might think this is a very hard process but if you switch to the daily or weekly time frame, it won’t take much time to develop such a unique strategy. You have to understand the fact, knowledge is power. Try to educate yourself properly so that you can make the best decision at the complex market condition. Forget about the complicated trading strategy and focus on long term goals. If required, spend some money and enroll yourself on a professional course. Never trade the real market without having strong confidence. Demo trade the market for the first few months so that you can craft a perfect system without taking too many risks. Learn to play safe to become a successful trader.
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