Four deadly mistake in spread betting profession
We all know trading is one of the most sophisticated professions in the world. It takes years of experience and extreme level of hard work to learn about the complex nature of the market. You might have very little knowledge about the financial industry but this doesn’t mean you can’t trade the market. Instead of using your real money, you can use the demo account and learn more about the market. The novice traders don’t have any clear clue to execute quality trades. They are placing random trades with emotions and losing a significant portion of their investment. But just have a look at the experienced traders in the United Kingdom. You will understand how well they execute each trade. Though there are many techniques to trade the market today we will share four deadly mistakes made by the novice traders.
Big lot size trade
Your lot size plays a great role in your trading success. The new traders always want to make a huge profit by taking maximum risk. At times they might have some big winners but considering the long-term scenario, they are the ultimate losers. Most importantly they are developing a very bad habit which makes it impossible for them to control their emotions. You need to understand the importance of proper money management in spread trading. Regardless of the quality of trade setup, you should never risk more than 1% of your account balance. However, the experienced traders often risk more than 2% of their account balance but for the first two years, you should never risk more than 1%. You need to learn the proper way to calculate the lot size. Know your risk tolerance level and assess your trading performance in the demo environment. If you feel confident with your trading result switch back to the live account.
Overtrading the market
Overtrading is one of the key reason for which the retail traders are losing money in spread trading. You need to control your emotions and trade the market in the higher time frame. It’s true, higher time frame trading is extremely boring but it will save a huge amount of your money in the long run. Be a confident trader and never trade the market in the lower time frame. In lower time frame, you will have many trade setup but this doesn’t mean you will be able to make a huge profit in high-frequency trade execution. Learn to trade the market along with the market trend and ignore the low-quality trade setup. Never let your emotions to trade on behalf of you.
Ignoring the fundamental factors
Fundamental analysis is one of the most important things that most novice traders ignore. The news is the price driving catalyst of the market. So if you ignore the fundamental factors, you will never be able to ride the long-term trend. Some of you might say the technical analysis is easy to understand and fundamental analysis is very hard. But in reality, fundamental analysis is more than technical analysis. Just keep yourself tuned with the latest market news and you will be able to understand the performance of a certain country economy.
Trading with the low-class brokerage firm
You must trade the market with the reputed broker like ETX Capital or else you will never get access to the premium trading environment. It’s true the low-class brokerage firm will offer you low-cost trading environment but the quality of their service is extremely horrible. Try to find a reputed broker who has a robust trading platform. Your broker should be regulated since you will be depositing real money. You need to do some extensive research about their terms and conditions so that you know they are not violating any major rules. Deposit a small amount of money and see how the new broker works for you. If you feel confident with their service get fully invested.