New traders are always confused because there is a lot to learn. After funding their trading account, they always daydream about becoming a successful trader. They become more biased with the successful trader and forget to train themselves properly. Eventually, they end up losing most of the investment. On the other hand, professional traders are not biased about the trades. They take trades in the stock market based on technical analysis, not on greed or fear. As a new trader, you might try hard and limit the risk but still, you have to spend a minimum of one year to become good at trading.
There are a few things you can avoid from the start. By avoiding these problems, you can improve your trading skills and save a huge amount of money in the learning stage. So, utilize the tips of this article and boost your confidence level.
Not having proper knowledge
A lack of trading knowledge is the number one mistake you can commit as a new stock trader. You need to know which stock to trade and what will be the best price to execute the trade. For this, technical and fundamental knowledge is critical. Without having these two skills, it will be more like gambling. Instead of trading with real money, you can spend some money to get a professional course from the top traders in Hong Kong. They will give you some valuable advice and this will help you learn more about the stock trading business. You can also read books and articles on a regular basis since it can improve your trading performance to a great extent.
Using too much leverage
Using too much leverage in each trade can ruin your performance. Brokers like Saxo capital markets know this and thus never offer insane leverage. In fact, a higher leverage trading account is subject to manual assessment in many brokers. So, having huge buying or selling power in the stock trading business makes you more vulnerable. Unless you have strong risk management skills, you should take more than 1:10 leverage. Even if you do, make sure you are not taking risk more than 1% in any stock. Diversify the risk profile so that you don’t have to lose too much money when a trade goes wrong. By doing them, you can secure your trading position.
Not paying attention to the trend
You must pay attention to the trend in order to become a professional stock trader. Those who don’t pay attention to the trend, end up losing money. Finding your desired trend is not as tough as it seems. Open the daily chart and use the trend line tool. If necessary, you can use the 200 EMA to find the trend. If the price is trading below the 200 daily EMA, you should be looking for a selling opportunity only. On the contrary, if the price trades above the 200 EMA, buying is your only option. Carefully assess the trend so that you don’t end up losing a big portion of your capital. Follow the standard protocols of trading and you will be able to make a decent profit.
Using a complicated trading method
The rookies often buy the most complicated trading method with the hope that it will change their life. But complicated trading method never changes the life of a trader. In order to ensure the safety of your trading capital, you must learn to trade the market with low risk and a simple strategy. The best way to trade stock is to develop your trading method. For that, you can use the demo account of Saxo and learn trading without risking any real money. When things become too complicated, ask the professional traders at the social trading community for help and they will guide you to trade the market. Never think a complex system is better for stock trading.