Why traders fail? How to avoid? – Part I
For a Successful Trader is a Short-Lived taken profit, ahead of the upcoming good trade must be established. But failing is the trader's non-stop companion; generally, a bit of success connect with years of failure and misfortune.
Traders wasting their time by choosing personally raise, dusting off the dirt and giving it another go then they actually do winning.
Training with Demo Account
Imagine it's the starting day of your trading race. You have smacked it lucky and got a business with an all key bank working on the trading desk.
Experienced traders know that the variation between demo and real trading is so good, that to spend months training on a demo account is not going to benefit you be successful. Rather, you have to practice in a controlled presence with real money.
Let's look at the other outlooks to illustrate the point. Think there are two traders. One‘s have100 trades on a live account, Although the other one has 100 trades on a demo account. Which one you think is going to have made the most advance in their trading business? Surely, we all know that. It's emotional. You have to play the game below the pressure line of the moment to lead the learning curve.
Many traders will give you chances as to why they do demo trade, few of which on the basic sound reasonable.
• You don't have a profit trading strategy
• If you can't make the profit on a demo account, how can you make it on a live account?
• It’s not comfortable live trading yet
But these are simply basis to avoid doing the hard work and taking the calculated risks with real money requires to actually learning the art of trading.
Behind all these reasons are fear of loss, and you can't handle out of fear if you anticipate winning in the business.
Making money is a bad thing?
It's not in itself, but the thing is trying the money first is the bad thing.
Let's get back to one example of a bank trader on their first day of its trading job. When you are given you 1 million dollars to trade, you are not going to be predicted to turn it into 10 million within a night.
Instead, your job will be not to fail it.
Too many traders will come to the market with their eyes sparkling, thinking only the profits. Rather, you want to be your risk managing first, and after that, you can worry about making money is secondary.
Your only focal point is controlling your risk and conserving your trading assets, ahead of you worry about making any money.
Trade too small
Another primary error was that of trading too small.
Hold your money! You might be thinking of you should be focusing on protecting my capital? Maybe Should I not be trading small leverage to do that?
You will be right. The problem faced by the most of the traders is they will go and trade too small to usually take things seriously. If you're trading with small size and losing $10 a trade, then you are not going to give it the proper focus of concentration.
Rather, you should be trading at least a size that you can naturally feel. Make sure that your positions are relevant to you. I am not advising you should take an insane amount of risk but do trade at a size that keeps you hooked. Your positions should be huge enough so that your impression of ever win or loss trade.
Overtrading is the main reason that most traders lose capitals.
Trading too much causes huge issues:
• You lose huge capitals in a short time
• You lose your positions that all go against you at once
• You get confused about your trading strategy
• You get more emotional and trade horribly
You want to closely control the total of trades you use. This is the first objectives you should do when you start trading.
Try taking one or two trade per day if you are day trading, or once a week if you are long-term trading. Day traders should have a maximum of 1 or 2 positions open at one time. For long-term traders, keep it limit your positions 3 until you surely know what you are doing.