There are many things in this industry that is better to avoid. People do not know and they try to get in touch with everything and this is how they lose their capital. If you read this article, you will know about some risks that are hidden and not known by most of the people. Traders who are aware of these risks have become aware by losing their money. This article will tell you when you should maintain a distance with the market if you want to keep your investment safe.
Trading against the market trend
Those who are relatively new to this profession are always making mistake. The new Aussie traders don’t really understand why they should trade the market with the market trend. They simply execute a trade against the long-term trade and loses a significant portion of their investment. But this not the perfect way of your managing your risk.
The successful traders always believe in simple trading structure. They trade the market without making things overly complicated. Forex trading is really easy provided that you know the perfect way to manage your losing orders. Never become frustrated by seeing the random output of each trade. Take your time and try to understand how the expert Aussie traders are trading this market. And never let your emotions to take control of your trading decision.
Trading when the trends are volatile
Volatility is one thing that has a debate among the traders. The traders are divided into two groups and many groups believe volatility should be avoided. Although it cannot be denied that this volatility gives the chance to make our profit, it exposes us to greater risks than the rewards. When you find volatility in the trends, do not place your trades and step away from the market. Professional trader’s advice the novice traders to learn the trading and then trade with volatility. The trends go up and down with speed and it is hard to predict the correct trends. To stay safe, it would be wiser if you do not simply place trades on a volatile trend. If you are trading with scalping or day trading strategy, you do not need to listen to this advice. Scalpers and day traders make their money through short-term trading that is best rewarded when the trends are volatile.
Trading in holidays
Holidays are a time when you should really stay at home and enjoy the time with your families. There are some hardcore traders who like to place trade every day in their lives and they have hardly a good time in making money. They lose more than they made and they never get to make a consistent profit. At the time of holidays, the industry is closed and the major trading sessions are also not opened. It affects the global transaction and the volatile and the movement of the trend is slower than the normal days. You make money when people exchange their money and during holidays, it does not happen. We advise that you do not place trades during holidays like Christmas and other big off days.
Setting a big position size
Even if you are rich, we suggest that you keep your positions size small. A big positions size can bring unnecessary risk to your deposit. Wise traders always keep the positions size small and focus on their skills. To become successful, skills is the most important tool that is needed.
Leverages
They sound lovely but they are deadly in nature. Leverage shows you the bright side but hides the ugly side what can happen if you lose your trades. If you want to test your skills, try practicing in demo accounts with leverage. You will get an idea of how harmful it is. Do not listen to your mind and always stick to your plan. Using leverages can cost your capital if the trades do not go as planned.