We all make mistakes, bigger or smaller. But some mistakes can cost you money, especially when it comes to online forex trading. How can you learn from your mistakes or from those of others?
Mistakes, oops, m-i-s-t-a-k-e-s. They are part of our life. Most of the mistakes you may make won’t have important consequences in your life, but if you are trading forex—which is a high risk type of trading—mistakes can have a huge impact on your money and that can affect all aspects of your life, including the people around you. So it is important to learn what mistakes are typical in online forex trading before you open an account and how to avoid them. Let us talk about two important mistakes traders make.
This means that you go beyond the risk limits you have by having too many open orders or by spending too long trading in front of your computer.
What effect does having to many open orders have on you? It exposes you to unnecessary stress. Trading can be, and it is in fact, a source of stress, but that stress can be managed if kept between certain limits. Having too many open orders multiplies your stress levels and that is emotionally and mentally hazardous.
In regards to spending too many hours on your computer, that has an adverse effect on you too. Online forex trading requires all your brain-power. If you are using all your brain power for hours, your brain will run out of juice and then you will go into “low battery brain mode”. In this mode, your skills to analyse market movements turns off, meaning nothing you do has any chance of success.
rders multiplies your stress levels and that is emotionally and mentally hazardous.
So, to avoid that, make sure you get all the sleep you need to be fresh when you start trading. Make yourself a trading schedule and adapt it to your performance as you get more experienced.
2. Controlling your emotions
When it comes to emotions, we need to control them rather than letting them control us. What are some emotions that are often involved in trading that affect your judgement?
In summary, if you stabilise a good trading routine, a practical trading plan, and keep to it, you will avoid overtrading and will be able to control your emotions. That is the beginning of success in online forex trading.