Foreign exchange is a huge market for day
traders. The market offers endless scope for forex day traders to earn profits.
However, due to certain mistakes, their profits may become narrow. As per the
forex broker Veonco, the 3 most
common day trading mistakes include trading without the use of stop-loss,
adding to a losing trade, and risking the capital that cannot be handled.
1. Trading
without the Use of Stop-loss
Having a stop-loss order for all the day trades
will be beneficial for you. With stop-loss, the benefit is that if the price of
the trade is moving in a contrary manner, then it will get you out of that
trade. Thus, you can skip the risks involved in a big way. Also, you will
prevent yourself from getting into losses more than what you can manage.
2. Adding
to a Day Trade Which You are Losing
When you add more to a day trade that you are
losing, then the end results can be disappointing. You may be adding in the
hope of seeing a reverse trend, however, the price may unexpectedly move
against you. As you can imagine, your losses will get bigger while your profits
will narrow down. Such a practice may not be healthy for you as a forex day
trader, as is explained by the forex broker, Veonco Review.
3. Not
Knowing How Much to Risk While Day Trading
Before you began forex day trading, did you give
a thought to how much capital you can risk? If you did not, then you should
definitely do it now. It will be a good idea to risk less than one per cent of
your capital when you are making an individual trade. By doing so, you will be
risking only what you can afford to let go.
All in
All,
We explored the 3 common mistakes which forex day
traders can make. By avoiding these mistakes, day trades will take a rewarding
turn for these traders. And as far as the profits are concerned, a rise will be
seen.
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