Top 10 Mistakes that a Newbie Trader Usually Makes

Forex trade involves lot of thinking and understanding the logics of the trade. Amateurs and sometimes those involved in the trade for quite some time are prone to commit mistakes in trading. Committing mistakes is part of trading. But as you gain experience and expertise in the trade, the chances of committing mistakes should become negligible. Your chances of winning the trade and making profits shall increase.rnThe common mistakes that are usually committed by many people in the trade are:rnMistake no.1: Following others blindly: There are people in the forex trading who continuously follow others and do what others do, just to save themselves from committing mistakes or letting go any opportunity. But this is the biggest mistake they do. One should not blindly follow others. A successful trader is one who reacts to the situation prudently, before others could gain from it. This can be done only by analysing the situations, forming opinions and strategies and taking corrective course of action.rnMistake no.2: Trying to reverse your positions often:rnIf you are wrongly positioned then do not try to change your position. Such frequent change of positions shall incur you huge losses if the market starts moving against your position. Just get out of the trade, pause and take another beneficial position.rnMistake no.3: Assuming the highs and lows:rnA prudent trader waits for the market to settle to determine the high or low positions. Just by assuming the high or low positions and trading can result in irreparable losses. So just wait for the market price to act and confirm the high and low positions. Mistake no.4: Lack of control over emotions:rnIt is very important for a forex trader to control his/her emotions. Successful traders always remain patient come what may. Even if they are in wrong positions they wait patiently for the next move of the market and then take corrective actions. Being focussed and patient enables a trader to take intelligent and prudential decisions.rnMistake no. 5: Delaying response:rnPeople who constantly adjourn their responses to the trade are considered worthless in the trade. Although it is not advisable to act on the gut instinct, it is also not advisable to be over cautious and indecisive. A good trader is one who responds quickly and courageously to the market reflexes.rnMistake no.6: No proper control over the losses:rnWhen you start incurring losses, it would be better to stop at one point and exit the trade for the day. You should be brave enough to accept the defeat and move further. You should decide a particular point where you should call for stop loss. If keep on hanging over the losses and retaining them then unfavourable market trends can create a havoc for you.rnMistake no.7: Eluding stop loss:rnWhen you feel you are going to end up with a loss, it is advisable that you use stop loss to protect yourself from the disastrous loss. One should know when to place the stop loss. Tight use of stop loss can also make your existence in the market questionable. Prudent use of stop loss can save you from the losses and carry on trade efficiently.rnMistake no. 8: Control your greedy nature:rnIf you find the market is working in your favour and you are making profits, it would be wise to take the profits and be contended. There are people who wait for windfall to happen so that they can become richer. This greed leads to huge losses in case the market takes a u turn.rnMistake no.9: Concentrate on one or two markets:rnThere are traders who wish to make profits quickly and for this reason they venture into various markets. It shall result in total chaos. If you trade in many markets then you will not be able to concentrate properly on any of them. You shall fall short of information for taking informed and good decisions. So it would be better if you concentrate on few trades that are co-related to each other.rnMistake no.10: Not doing proper analysis and homework:rnForex trading is no doubt a highly rewarding one but it is also quite demanding. You need to equip yourself with proper charts, know the trends and learn different trading methods to keep yourself alive in the market.rnConclusion:rnAvoiding the above stated mistakes shall make you a good trader. Your commitment shall earn you success.