Online trading is no childâ€™s play! You need to be very smart and proactive if you wish to trade online profitably. However, many experienced and inexperienced traders tend to make certain mistakes that restrict their earnings and increase their chances of incurring a loss.
To optimize and boost online trading rewards, it would therefore, be beneficial to know what mistakes an online trader can make, knowingly or unknowingly. Below are some of the common mistakes made by online traders that must be avoided in order to boost the rewards one can gain through online trading.
Not Having a Plan
Those tasks that are executed with a plan in mind tend to be accomplished more successfully than those that are carried out randomly. A plan, therefore, is crucial to success. When you trade online, you must follow your set plan in order to make profitable transactions.
Spontaneity may get things done for you but being spontaneous while trading online can be a complete disaster. When making trading decisions, do not follow your gut unless you have developed a proper risk management plan and have done your homework.
Not Having a Stop-Loss
Regardless of how experienced you are, you should not trade without a stop-loss. A stop-loss will invalidate your trade strategy, preventing you from incurring big losses. Not having a stop-loss is a big mistake as it can turn small and controllable losses into huge debts.
Clever traders will always use a stop-loss in their trade plan. The stop-loss can be determined by doing proper research and evaluation of the current market trends.
Shifting Stop-Loss Orders
If you shift or move your stop-loss orders so as to prevent getting stopped out, it is similar to trading without one. Moreover, shifting your stop-loss too; often depicts your lack of discipline while trading. This will also increase your chances of making greater losses.
If you do want to move your stop-loss, move it towards a winning trade to gain profits. Never move your stop-loss towards a losing position. Determine all your trading decisions based on extensive research and analyze critical market trends before you take any action. Platforms like MetaTrader4 and Trader Pro offer a number of tools that help you evaluate and monitor market trends. Visit ETX Capital to know more about these platforms.
Online traders should be well-informed about current market news and trends. Being ignorant can be a great drawback for you. For instance, you may find a currency worth trading, but a single news item can have a huge impact on currency value. Therefore, add event readings to your routine and make sure that you stay updated with the market news on a daily and weekly basis.
Never Be Overconfident
With time, you gain confidence when trading online. You learn how to stay in the game and make profitable decisions that help boost your rewards. However, never become overconfident as it can lead you to making foolish decisions that may backfire later.