Most newbie traders try to do too many things while trading in the hope of getting a higher ROI. However, that might not be a good strategy, after all. Every trader goes through a torrid time when they can’t figure out the problem in their strategy. Encountering a few successive losses in your trade doesn’t mean you have to lose your hope. It should be your learning curve to not make that mistake again. Newbie Forex traders often get anxious and start questioning the following:
- Are they trading emotionally?
- Are they not successful because they are not following a trading plan?
- Are they not able to tackle the changing market conditions?
These three questions indicate three significant problems that newbie Forex traders face during their early trading days.
1) Trading emotionally
Emotional trading is something that even veteran traders make. It is like following your instinct. The glowing opportunity to make some extra money can often turn against you. That is why experts from leading Forex institutions ask traders not to overtrade in the first few months. Forex Academy, for example, will explain the downsides of emotional trading in detail. Unless you check your emotions, you can expect to lose more than you earn at the end of the month.
Curbing your emotions should be your first lesson. This will prevent trading too much on a specific currency, letting losing trades run, and cutting winning trades.
2) Practicing every day
The excitement to earn thousands can lead to losing hundreds every day. Many Forex trading sites allow you to practice trading so that you are confident before trading with real money. However, many newbie traders try to jump the gun and trade directly without practicing. Don’t do that. Even if you read everything about Forex trading, it is still wise to warm up your hands with the demo account.
Using demo accounts help to practice risk management. If you are not familiar with the common cues from the Forex market, such as Japanese candlestick, shifts in the market sentiment, or different chart patterns, you may not be able to trade successfully for years. The loss will be unbearable, and you would not have trust in Forex trading anymore.
3) Tackling changing market conditions
You may have spent enough time with the demo account, you are not an emotional trader, but still, you end up losing money on your trades? Why? Maybe because you can’t cope with the changing marketing conditions. You need to adapt to these conditions and change your trading strategy to avoid significant losses. There can be plenty of reasons for the changing market conditions. Relationship with countries, agreement of a treaty, or the general economic failure of a nation; whatever it is, you need to stay prepared all the time.
Forex trading involves regular learning. If you have the hunger to learn, you will soon bypass these problems. However, it is always good to learn after making a mistake. So, don’t consider successive losses at the end of the road.