The new traders are always excited to trade the live assets. After opening their trading account they get busy with trading without knowing the key facts of the market. This market is all about probability and there is nothing you can do to avoid losing trades. The experienced Singaporean traders always consider the risk factors and trade with managed risk. On the contrary, the novice traders get emotionally frustrated after losing a few trades and they start taking a huge risk to recover their investment. But this not the proper way to trade the market. You have to follow the basic rules of investment. No matter how good you are at trading you should risk more than 2% of your account capital. This simple formula will save your investment in the long run. Though there are many things you need to know as a new trader today we will highlight the five major problems of the novice traders.
Lack of knowledge
The new traders don’t have any knowledge about this market. They trade with false confidence and ultimately blow their account. This market is based on three major factors. The first factor is a technical analysis which allows the traders to execute quality trades at the key support and resistance level. The second factor is known as fundamental analysis and it helps the traders to understand the strength of the market trend. Third but not the least is the sentiment analysis. Based on this three-factor you will have to develop a proper strategy to trade the market.
Lack of confidence
You must trade this market with the high level of confidence. Lack of confidence can cause catastrophic losses to your investment. In order to develop the strong confidence, you must use the demo accounts. Demo accounts will give you the perfect platform to learn about the complex nature of this market. Some of you might think demo trading is nothing but a waste of time. But in reality, this should be your first step to protect your investment from the wild swings of the market. If you can demo trade the market for six consecutive months you will have high-level confidence. This confidence will help you to execute high-quality trades at the key support and resistance level.
Lack of discipline
Discipline is one of the most vital things in currency trading profession. Once you have access to the Forex trading account Singapore, you need to ask yourself whether you can trade with discipline. If you break your rules, it won’t take much time to blow your account. The novice traders often become restless after losing few trades in a row. If you ever see the portfolio of the successful trader you will be surprised to see they have many losing trades. But they never trade this market with high-risk exposure. In fact, they always stick to their trading strategy regardless of the outcome of each trade. You need to be a disciplined trader to deal with this market.
Overtrading is a serious offense in the investment industry. You don’t have to trade all day long to become a successful trader. Those who are new to the investment industry are always losing money due to overtrading. They always think the more they will trade the better chance they will have in this market. But in reality, your profit factor has nothing to do with the number of trade you execute. You have to follow the simple rule of investment and you will see significant improvement in your career.
Ignoring the fundamental factors
Fundamental analysis is often ignored by the novice traders. But fundamental analysis helps the traders to ride the long-term trend. So if you believe trading the right profession for you, get ready to learn the fundamental details. Never trade this market based on the technical data only. Diversify your risk factors and trade with managed risk.