The forex market is a huge market and every single day trillions of dollars are being traded in the forex market. Many people in the world are participating in the foreign exchange market by knowingly or unknowingly. Previously trading the financial instrument was not opened to the retail traders as it is now. Due to the recent technological advancement, retail traders can easily trade the live assets in the forex market from their home. But if you look at the success rate in the fore trading industry then you will be surprised to see that most of the traders are struggling hard with their trading career. Statistics suggest that only 5 percent of the traders are making consistent profit in forex trading and the rest are losing money. In this article, we will discuss how the novice traders slow blow their trading account in the forex market.
Aggressive trading: Trading the financial market is an art and in order to make consistent profit in forex trading you must develop a strong trading knowledge. If you are relatively new in forex trading then you must work hard to gain a perfect knowledge of the financial market. All the experts who are trading online commodities have developed strong basic in the financial sectors through their hard work. They always trade the live assets with great level patience. On the contrary, the novice traders tend to trade every single signal in the market. They simply forget to filter the best possible trades in the market. All the aggressive traders use potential stopples but they lose too many trades in a single day due to their aggressive approach and thus within a few week they lose all of their trading capital in the market.
Overtrading: Overtrading is one of the most common mistakes that every novice traders make in the early part of their trading career. They simply think that the more they will trade the more money they will make. But if you look at the professional traders than you see they hardly execute one single orders while trading online commodities in the market. They know that a quality trade is thousand times better than a poor trade in the market. So if you truly want to become a professional trader in the financial market then making sure that you focus on high-quality trade execution in the market since it is one of the key factors to remain profitable in the long run. Most importantly if you trade the quality setups only then you can earn more even after executing one or two trades in a single day. So quality will be your prime concern while trading online commodities in the market.
Ignoring fundamental factors: Fundamental factors are often considered to be the most powerful price driving catalyst in the forex market. If you look at the professional traders than you will notice that every single one of them do the fundamental and technical analysis before they execute any orders in the market. If you don’t know how to do the fundamental analysis in the market then you will never be able to spot the trend reversal in the market. The long-term prevailing trend in the forex market often gets changed during the event of the high impact news release. So if you don’t know that there is a trend in the market then you will be always executing your orders in the market against the newly formed trend. Most of the novice traders realize that the long term prevailing trend is changed in the market after the losing all of their account capital. So be sure that you learn the fundamental analysis to save your hard earned money in the market.
Summary: Forex trading is not an easy task as it seems rather it is one of the most sophisticated business in the world. If you look at the successful trader then you will notice all of them are trading the highly reliable signals in the market with perfect risk management factors. They simply embrace their losing orders in the market and consider it as their trading cost. To be honest, if you trade the financial assets then you will always have some losing orders. But as professional traders your main aim should be high-quality trade execution with excellent risk reward ratio.