Daytradefeed.com has put together 5 Forex Day Trading mistakes to watch for
Day Trading can be a very profitable business, but devastating losses are common if you don’t know what you are doing.
At Daytradefeed.com, we want you to make money day trading–not loose money. Watching for these 3 forex day trading mistakes will help you achieve success.
Averaging down isn’t the ideal technique for day trading.
Lots of traders end up using the averaging down technique. Averaging down is not the ideal technique, but it can be easy to slip into.
The biggest issue is that when averaging down you are holding a losing position. This means you are possibly sacrificing time and money. Day Trading is such an ever moving process, that your money could be planted in a much better situation.
Another issue with Averaging down is that to you have to get a higher percentage on return to make up for any capital lost from the initial loss. For example, if you lose of our capital, you will have to get a return of 100% to break even. Maintaining these standards in unreasonable in the long run.
Averaging down will eventually end in a inevitably lead to a large loss. Market trends can remain in place longer than you can stay liquid. It is not worth taking the risk of Averaging Down.
Positioning Trades Too Early
Day Traders have to pay close attention to the news surrounding the market. Traders will become very familiar with what news will cause the market to move. It is impossible to know in advance however, exactly which direction the market will move.
Volatility is a key factor for day traders, but which way will the market move? It is not wise to jump to conclusion before news is announced. It is not worth the risk.
After the News Hits
News can hit the markets at any time. It seems like easy money to react and take advantage, but you must have a strategy! If not, results can be every bit as devastating as they would be if you traded before the breaking news.
Day Trading should take place after a trend has been defined. Being patient will lower your risk and increase your likelyhood of effective trading.
Risking too Much
More Than 1% of Capital on Forex Trades
Big risk doesn’t always mean big return. Most traders who take big risks eventually lose big. It is a common rule that traders should only risk 1% of capitol for a single trade.
Limiting the risk percentage will help keep your portfolio on track. Sticking to the 1% rule will ensure that no single trade will break the purpose of this method is to make sure no single trade will break the budget.
Avoid being Unrealistic
It is good to work hard and set goals, however being unrealistic can lead to forex day trading mistakes. The unrealistic expectations we set for ourselves can be projected on the market. The best technique is to watch the market and see it for what it is.
The best way to see the market for what it is is to create a trading plan. Research trading plans and testing them is the best method for day trading success.
If you are beginning to Day Trade, or if your current method is not yielding success, try us out. We’re here to help