|
Probably the most frequent mistake that forex traders make is that they over trade. Over trading is when you are placing far more trades than you are supposed to be making. The primary reason why traders over trade is because they let their emotions take control over them while trading and the end result is more destructive than beneficial. If you are one of those traders who is not even aware that you are over-trading than you most probably are. If you have ever been in a situation in which place an extra trade just because the last trade that you closed was a winner and not because it is justified according to your trading plan than that would be an example of over-trading. Another example of over-trading would be if you are supposed to be searching for a logical area of where you can enter the market and wait for the candle to close before you enter but instead enter the trade just because you saw the current candle make a large movement in a particular direction. There are countless other examples of what can be considered to be over-trading but in essence it happens when the potential of profits cloud your judgement and incites to you make unjustified trades that are not part of your original trading plan. One of the best ways to prevent oneself from over-trading is by having a well-defined trading strategy and trading plan. In the trading plan you can set rules which limit the number of trades you make and the reason why the trade was made in the first place. The idea of creating the set of rules is to make your trading more mechanical than emotional. If you don’t have a method of cutting out the emotional aspect from your trading you are most likely go ahead and over-trade. Another way to deter you from forex trading is to consider trading like a boxing match. The number one rule in boxing is to protect yourself from your opponent. While keeping your guard on, you also need to make sure that you don’t not over exhaust yourself by punching too much and wasting your energy. If you get exhausted too quickly, you run the risk of getting Knocked Out. Similarly in trading you need to protect your capital from being taken away by the market. If you make too many trades you will exhaust your account by paying a lot of brokerage and also increase the chances of incurring a large loss that could blow out your account. The main idea of trading is to only take a few selected trades that will rake in large profits. Even in boxing, points are only awarded if you hit the opponent on the specifically marked parts of the body. So make sure you apply a similar strategy to your trading as well. Only place trades that will bring profits with minimized risk. Don’t try to over-trade and exhaust your account. The key to success in trading is to make a limited number of well-planned trades rather than making a bunch of emotional trades. Visit us at :-http://www.fideliscm.com/
Related Articles -
ecn broker, online trading, Forex Online Trading, forex trading, forex broker,
| 
