The rookie traders are always excited about the profit factors at trading. They are busy with different trading strategies and trying their best to create the best trading method. Even after working day and night, they manage to find some unique way to blow up the trading account. In the online marketplace, everyone reads about profit-making opportunities in Forex. People are getting biased by learning different kinds of trading strategies.
It’s time to know how the naïve traders are blowing up their accounts. To protect your capital, you must read this article very carefully. Let’s dive into the details.
1. Opening a high leverage trading account
Leverage is the key factor that helps us to trade with big lots. The use of big lots has made the Forex industry popular among youngsters. But to manage the trade in a high leverage account, you must have extreme level confidence and skills. Even the pro traders find it hard to deal with the high leverage trading environment. Try to open a low leverage trading account so that you never get insane buying power to recover the loss. If you trade with the low leverage account, you are always going to enjoy a safe trading environment.
2. Trading against the major trend
To protect your trading capital, you should learn to trade with the trend. But the rookies always find a way to trade the tops and bottoms of the currency pairs. They think it is the best way to make a big profit from this market. Even the professional traders find it hard to pick the top and bottom of the trade. So, try to avoid trading against the major reversal since it can impose a great threat to your career. Stick the traditional concept of trend trading method so that you don’t have to deal with consecutive losing orders by placing trades against the trend.
3. Trading with big volumes
The intermediate and rookie traders often increase their lot size while using the copy trading platform. They simply think the professional traders will never lose money. The professional traders have to deal with losing trades. So, stop taking a high risk when you are using a signal service provider or have an active account connected to the copy trading platform. The safety of your investment should always come first. Try to set rational goals so that you are not forced to trade with a big risk. Though the professionals are very good at analyzing the market, they are not able to avoid losing trades.
4. Picking the tops and bottoms
Trading the tops and bottoms is one of the biggest mistakes naïve traders make. Even the elite traders at Rakuten avoid trading the tops and bottom. Being a new trader, you should follow the trend trading method. However, if you still intend to trade the tops and bottoms, never risk more than 1% of your account balance. The safety of your trading account should be your priority. You don’t have to trade the major reversal to make living out of trading. Try to analyze the fundamental analysis so that you can pick the tops and bottoms to avoid placing any trade. You should not be concerned to trade the key reversal as it is extremely dangerous.
5. Actions of the emotional trader
The emotional traders are always taking a high risk. They are desperate to recover the loss. But desperate actions from emotional traders always result in disaster. You have to think about the conservative approach at trading. Learn to control your emotions at any cost so that you don’t have to deal with big losses. Believe in your trading strategy and create a unique routine so that you don’t have to break the rules after losing a few trades.