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5 Trading Mistakes To Avoid





Trading is fun--there is always a trend, and there is always the excitement brought about by the uncertainty of the levels of the market. Is it going to rise? Will it plummet down? As we are all human, we sometimes tend to make mistakes that end up hurting our trading career.

 

While there are a lot of ways you can make a mistake in trading, the good news is that there are guides like this to help you avoid falling for them in the first place. If you are to forex trading in Australia, here are the top five trading mistakes you must avoid at all costs.



Buying without a plan

This is one of the most common newbie mistakes that one can do. Oftentimes, this happens due to the person not doing any research at all, or not absorbing things that they learned in research enough to help them make a sounder and better decision.

 

Buying a stock or a currency without a plan is like charging into a battlefield without any weapons, carrying only with you the brave heart of a true warrior. At the end of the day, your brave heart will not help you win, and your defeat will not even be as noble as you expect it to be.

 

A lot of newbies just go in blind, buy anything, and wait for the value to go up. Sadly, this rarely happens, if not at all. Most of the time, trades are done this way are bad ones and since what they do is just wait for it go up so that they can cash out, they end up losing 20% or even more instead.



Not keeping a trading journal

When you think of trading, having a journal is not the first thing that you would think of. It may not be something that you would end up thinking of at all. After all, you are most probably not someone who is into journaling even your daily life, right? So, you might ask, why keep a journal of my trades?

 

A good journal is more than just a record of notes containing all the trades you made. In your journal, you should take down all your trades--the good ones, the bad ones, and the really ugly ones. Then, try to input as many notes under it as possible: why you entered the trade, how it turned out, and what you learned from it.

 

The true purpose of your journal is not to simply record your trades, but for you to be able to look at your entries, your exits, and your timing--and learn from yourself from there.



Putting your trust in “promoters”

So-called stock or forex “promoters” as just as bad as fake gurus that offer you “valuable” information that you otherwise Google and read on by yourself. No matter how sweet and convincing their promises are to you, the truth is that you can never be a millionaire in one month through investing your money to a “promoter.”



Ignoring indicators

Indicators are not simple and empty wild guesses by someone typed from a computer. Indicators are there so that, when used properly, you would be able to know what move you should do next.

 

When the indicators tell you that a trend is to close on a good spot, go home and take your profit. On the other hand, when indicators tell you that it is not yet ripe to make a trade, don’t--you might think that the opposite might happen, but that is unlikely the case.



Trading with emotions, not strategy

One of the things that could hurt your trading career the most is when you let your emotions take over your critical and analytical thinking. If you realized you made a bad trade and end up losing, do go about making yet another reckless and unplanned trade just so that you can take back what you lost. In the same manner, do not go on a buying spree just because you gained a lot on one trade.



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