Silly Mistakes CFD Traders Make
Trading is difficult enough without a simple mistake taking away all your hard won profits. Here are a few ideas that could save you thousands by avoiding silly mistakes.
Buy or Sell, Which Button Was That
Maybe you have pushed the wrong button when you try to exit from a position. Pushing buy instead of sell is quite common, especially if you trade rising and falling markets. This is most common on the exit and rather than getting out of the trade you end up with twice as much.
When you place a trade immediately check your open positions. By doing this you will pick up the mistake before it costs a significant amount of money. Not realising that you have an open position can be far more expensive.
Alzheimers And Trading Don't Mix
If you exit an order when you are watching the screen, make sure you remember your stop orders. Assuming you have placed a stop on the trade, which you always should, then you must cancel the order if you exit before the stop is triggered. Forgetting your stops is a risky exercise and if the stop is triggered it could be hours before you know that the order was traded. The market may move in your favour, but it is not something I would like to gamble on.
Before exiting the trading platform at the end of a trading session make sure you check your open positions match your stop loss orders to avoid any surprises when you next enter your trading platform.
Zeros Don't Mean Nothing
If you have calculated the correct position size, it is still possible to get it wrong by adding on, or forgetting an extra zero. Too many zeros can results in large losses and too few zeros can dramatically reduce your profits.
By going to your open position order screen you will be able to pick up whether the order you placed was correct.
Stops Too Tight, You Lose
If a stop is placed too close to the current price, it is very likely that the stop loss will be triggered by normal price movement. While the trader that places a tight stop is attempting to avoid losing money, this is often the end result of their actions.
Stops must be placed far enough away from the price action to exit you from a position if your trade view turns out to be wrong. Give the underlying share room to move to avoid getting caught by this CFD mistake.
Discipline Is Essential
The last common CFD mistake is to enter a trade when you know that you should not. It is common for new traders to chase a share and jump on board after the share has been moving, however they will quickly learn the error of their ways. A beginner has an excuse, they do not know any different, but even more experienced traders are caught in this trap.
The market offers an unlimited supply of trading opportunities, far more than you could ever possibly trade. If you miss a trade today, there will be another trade along soon enough. By following a trading plan you can avoid getting caught by impulsive trades, which can prove to be costly.
Avoiding these silly and costly mistakes will certainly improve your trading results. It is not necessary to throw away money unnecessarily. - 23305
Buy or Sell, Which Button Was That
Maybe you have pushed the wrong button when you try to exit from a position. Pushing buy instead of sell is quite common, especially if you trade rising and falling markets. This is most common on the exit and rather than getting out of the trade you end up with twice as much.
When you place a trade immediately check your open positions. By doing this you will pick up the mistake before it costs a significant amount of money. Not realising that you have an open position can be far more expensive.
Alzheimers And Trading Don't Mix
If you exit an order when you are watching the screen, make sure you remember your stop orders. Assuming you have placed a stop on the trade, which you always should, then you must cancel the order if you exit before the stop is triggered. Forgetting your stops is a risky exercise and if the stop is triggered it could be hours before you know that the order was traded. The market may move in your favour, but it is not something I would like to gamble on.
Before exiting the trading platform at the end of a trading session make sure you check your open positions match your stop loss orders to avoid any surprises when you next enter your trading platform.
Zeros Don't Mean Nothing
If you have calculated the correct position size, it is still possible to get it wrong by adding on, or forgetting an extra zero. Too many zeros can results in large losses and too few zeros can dramatically reduce your profits.
By going to your open position order screen you will be able to pick up whether the order you placed was correct.
Stops Too Tight, You Lose
If a stop is placed too close to the current price, it is very likely that the stop loss will be triggered by normal price movement. While the trader that places a tight stop is attempting to avoid losing money, this is often the end result of their actions.
Stops must be placed far enough away from the price action to exit you from a position if your trade view turns out to be wrong. Give the underlying share room to move to avoid getting caught by this CFD mistake.
Discipline Is Essential
The last common CFD mistake is to enter a trade when you know that you should not. It is common for new traders to chase a share and jump on board after the share has been moving, however they will quickly learn the error of their ways. A beginner has an excuse, they do not know any different, but even more experienced traders are caught in this trap.
The market offers an unlimited supply of trading opportunities, far more than you could ever possibly trade. If you miss a trade today, there will be another trade along soon enough. By following a trading plan you can avoid getting caught by impulsive trades, which can prove to be costly.
Avoiding these silly and costly mistakes will certainly improve your trading results. It is not necessary to throw away money unnecessarily. - 23305
About the Author:
Jeff Cartridge is a private trader from New Zealand and co-created the website LearnCFDs.com Discover Ways to Make Serious Money with a Small Investment CFD Trading Strategy
posted by Mr. Forex at
2:33 AM
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