True; it’s their trap and new traders follow this road since, this path is looking so attractive!Certainly Ary, many new traders are expecting to become millionaires with only few short term trades. But, I dont blame them at all as there are is huge amount of marketing materials from various brokers trying to provide exactly this picture to all new traders
Yes , i agree New traders make a lot of mistakes which can cost a lot in the long run. New traders therefore should avoid emotions at all cost , should not act greedy , avoid over trading . They should act disciplined and spend good amount of time in analysing the markets and price movements to make sound trading decisions.
A trader must follow his system. How else? You get losses, then in retrospect you start writing down the system input in your errors. You think you should have guessed for some reason that the entrance is false. So you do not have an unambiguous trading system, if you allow thinking over during the trade. Or you are not ready to accept losses on your trading system.Traders tend to make a lot of mistakes. They may start trading without having a plan, just on the basis of hit and trial. They blindly follow the systems and anticipate a lot of profits, that takes them nowhere but to incur losses for themselves. Lack of a diversified portfolio and improper setting of limits are another faults that traders have.
Some of the common trading mistakes are as follows :
Not using stop losses
No understanding leverage
Trading without a plan
Emotions based trading – fear, greed , unrealistic expectations etc.
Lack of knowledge and research
Over diversifying a portfolio
However, these can be overcome with practice, time and effort as one gains experience.
What if its just fundamentally not working?Losses are inevitable even the best traders lose sometimes. However changing your strategy/approach after losing a few trades sets you back on back on the learning curve. Stick to one approach and don't change your trading strategy in a row.