Forex trading has become one of the most lucrative professions in today’s world. Many retail traders have already changed their lives by learning the art of trading. But if you think mastering the art of trading is an easy task, you are making a big mistake. Just like any other profession, you need to read a lot and learn about the market to become successful. Learning should become a continuous process as it will help you to stay up to date with the market. Never stop learning and believe that you will succeed as a professional trader.
There are many reasons why rookie traders struggle with the trading profession. Since it is not possible to highlight all those reasons in this article, we are going to discuss the most common ones. Let’s dive into the detail.
Lack of knowledge
The majority of rookie traders don’t have enough knowledge about this market. Most of the time, they are taking trades based on emotions and gut feelings. At the time you might know about the basics and be ready to take the trades in the real market. Instead of trading with real money, we suggest trading the market in the demo environment. By taking trades in the demo account, you can easily improve your skills and develop a strong basic. Once you become skilled, you can significantly improve your decision-making ability. Try not to trade the market aggressively as it will make things worse.
Using a low-end broker
Novice traders usually trade the market with low-end brokers. They think it will save them money and let them earn more. But if you know mere om Saxo, you will never trade with a low-end broker. High-end brokers always offer a premium trading environment to retail traders so that they can execute high-quality trades. Being a novice trader, try to find the best broker so that you don’t have to deal with any unwanted problems. Take your time and never think you can earn more with a bad broker.
Trading the lower time frame
Rookies often take trades in the lower time frame and think it is the best way to earn money. But if you do the math properly and trade the market in a higher time frame, you will never have any problem with the trade execution process. Though a lower time frame provides more signals to retail traders, it can increase the risk factors significantly. To keep your fund safe, you should be taking the trades in a higher time frame. Try to not follow an aggressive method as it will make things too complex.
Trading the key news
Novice traders love to trade the major news as it increases the chances of making money. The market becomes extremely volatile and that provides a unique opportunity to catch the big market movement. But if you do the research properly, you will realize trading the major news is a very tough task as the mighty dollar often loses its strength against most of the major rivals. So, you should not trade the market during high-impact news releases. Once you learn to take trades by analyzing the major news, you should be able to improve your decision-making ability.
Trade with the trend
Being a currency trader, you should always trade with the major trend. The majority of rookie traders try to trade the market against the major trend. Thus, they lose money most of the time. If you want to keep your fund safe, you must learn to trade the market in a very strategic way. Once you become comfortable with the trade execution process, you will realize the importance of having a trend trading strategy. Always remember, the trend is your friend. So, if you ignore the market trend, you could lose money most of the time.