Frequent mistakes of newbies in trading

We will tell a few words about mistakes of a novice trader, how to fix them, what to avoid.

In the financial markets, many traders fulfill only basic emotional needs for excitement, thrill, and dependence on random rewards. But only a rational approach implies planned and gradual work — the only way to justify the time and money spent in the financial markets.

Mistake №1. Be overconfident.

Self-confidence is fraught because it breeds complacency and provokes excessive risks, or exceeding the rational volume of positions. Another disadvantage of self-confidence is the transition to intraday trading. This type is considered the most dangerous and requires a lot of experience. Another disadvantage is that the short-term style implies tight stops, which, as is known from statistics, negatively affects profitability, since the market is more likely to reach a small stop than a wide one.

Mistake №2. Distribution to all markets.

Due to the lack of experience and the development of their own routine, a novice trader can often switch from market to market, from currency to stocks. However, frequent switching can detract from a concentrated trading experience based on a narrow selection of instruments. In this case, you should choose one or two classes of instruments, improve your analytics and trading plan on them. And only then include additional financial instruments.

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