The main mistakes of a trader
How many people will be outside due to the same mistakes, which make traders all over the world, draining their deposits? Someone will hold his ground for a month, someone may be for two months, but for someone two days will be enough to say goodbye his deposits, having given them to more successful traders, who can earn in the market and trade binary options with a profit.
All traders, and there is no exception, come through the way of learning, bad bargains and losses, after that they analyze everything, and finally they start understanding that their actions have cause-effect relation with increasing and decreasing of their trading depot. There mustn’t be any mistakes and light-mindedness in financial market. However, very often beginning traders start their way with all of these things, and the faster you’ll go through it the quicker you’ll start trading profitably.
So, let’s examine the most common mistakes, which usually lead to draining of traders account. If you remove such a pernicious practice from your trading, you can be sure that you will have stepped on a new stage on your way to your first million dollars, and may be, you will jump over five or even ten steps on your way to your perfectness.
The first mistake. Self-conceit and the lack of knowledge
A freshman, who comes to trading market of binary options, having examined the nuts and bolts of this kind of trading, thinks that he can move mountains. But please don’t mix up self-confidence, which is absolutely necessary for every trader, with self-conceit, which is the most dangerous enemy of a trader. Very often beginning traders don’t listen to advices and are ready to strain to be in action, having missed necessary learning of trading technology, the choice of trading strategy and testing it on demo account.
At the same time, if you trade on “demo” rather well it doesn’t mean that you can start trading in “reality”, because these two kinds of trading are completely different. “Demo” trading excludes risk factor, that’s why a trader takes such kind of trading easier. But in reality, dealing with real trading, real money and real risk, traders start acting in another way. That’s why don’t be in a hurry to jump over “demo” account onto “real” one. It’s better to spend more time, examining the market, becoming more self-confident, and creating your own trade strategy.
Remember, the process of getting to know the market takes many years. Don’t hurry. To start getting rich with the help of binary options trading , you need some time to develop yourself as a trader.
The second mistake. The lack of trading system
One more common mistake among traders is the lack of trading system. Only constant analysis of trading , profitable deals and losses will help you to avoid failures in your trading practice. However it’s not enough just to analyze your own mistakes, it’s necessary to trade according to a certain system, which is called a trading strategy in financial market. What is it? It is a clear set of all trading rules, which lead trader to profits. For example, trade with a trend supposes that a trader will follow the following rules of trading system:
- to strike a bargain only according to the main trend motion;
- bargains are struck at the point of rebound of trend line;
- not to trade after seven p.m. , when the majority of traders, having fulfilled their plan, are just waiting for the end of working day, and you can face the flat market and etc.
The third mistake. Greediness
We are speaking about one of the most pernicious vices of a person. Do you remember the proverb: “greed killed the wolf”? So, it is the best proverb for trading.
Everyone, who wants to attain the luck, actually catches the moose by its horn, draining his deposits instead of increasing them. For example, a successful businessman, who sells fruit will never buy 10 tons of parsley, having spent all his money on it, to resell it, because: 1. To sell parsley you need special warehouse with strict rules of keeping it, according to special temperature, humidity and lighting. 2. He won’t be able to sell 10 tons of parsley for a short period of time. 3. Parsley will be spoiled before a businessman sells at least one tenth part of this product. This funny example with parsley points brilliantly to the risk factor, which is in any sphere of activity, connected with finances. The financial market, and binary options trading in particular, has many factors, which can make your profitable bargain an unprofitable one:
- trading during the currency of the contract of important economical news, which deploy quotes assets and throw them irretrievably aside from your deal;
- sinuosity of the price of asset will throw this price to the opposite side from the direction, that you have chosen, price motion vector was chosen right by you, however the price rolled back…
Only strict keeping the rules of money management will help you to save your deposit like huge bulletproof door in exchange store of a bank.
The forth mistake. Trading against trend
Such kind of trading we can compare to the expression “Sisyphean task”. You will earn with setbacks, but the main direction of trend motion will “eat up” your deposit, taking bigger and bigger parts.
“Trend is our friend” – this is one of the most popular proverbs among traders all over the world, do you want to achieve success in trading? In this case, trade only to the side of the main trend motion and you will have the luck and good results.
It always seems that one-side movement will finish soon, and setback or reversal will start and you’ll be able to earn easily. However, “trend will continue its movement, than change it” – and this is one more wise expression of traders in the market.
That’s why, enter at the end of setbacks on the spots of price recoil from trend lines, in this case you will have great results.
The fifth mistake. A desire to regain your money
Such desire pushes traders to new mistakes, because in such moments a person is influenced by impulsion and passion, but not logic and objectivity. Everything, which is connected with passion can’t be connected with binary options trading. Have you come to trade binary options to get passion? You’d better visit a gambling house, there you can find a place for yourself. In binary options trade they use no more than 2-5% of deposit size in one deal.
The sixth mistake. I want to get rich quickly.
It’s a dream, which all beginning traders have. If you also have such a dream, go to the bank and rob it or buy a lottery ticket, because binary options are for obstinate and clever people. You’d better remove the word “quickly” from the phrase and go on trading. In this case your thoughts will coincide with thoughts of successful traders and you will achieve success and come your dreams true. Otherwise the word “quickly” will help you to “drain” your deposit fast and efficiently.
The seventh mistake. Emotions to the limit
Have you got your blood up near the terminal? In this case have a cold shower or you’d better stop trading. Emotions are not a good friend for a successful trader. As soon as impulsion starts overcoming cold heartless planning a trader starts making mistakes.
After all, if you need a good advice, then read and input in your trading one very good and effective practice, which can make you a millionaire – this is a trading plan.