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  1. #1
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    3 habits that prevent traders from making profit

    Hi traders!

    Successful trading is often not about unique trading system, it’s about doing certain things over and over again, or I would rather say – not doing them. Many beginner traders often do the same mistakes over and over again and if you would simply avoid what they do (or even do the opposite), you would get an edge on the market.

    I created my own TOP-3 list, you can add some more in commentaries to this post. I haven't uncluded money managent here, just chart patterns (market behavior) that traders fail to read properly.

    Selling «expensive» and buying «cheap»

    Most popular version of this principle is «buying bottoms» and «selling tops». When price suddenly breaks out from some range (say, to the upside) and starts to move rapidly, most traders will sell against this rally. That’s an instinct. If we’ve seen before small volatility and absence of significant price action to whatever side, we tend to deny breakout, we treat to new prices as «unfair» and rush to open a trade. Why in this case most traders are in hurry? They thing that current price action won’t long last and price will quickly drop back to the previous trading range.

    Look at yesterday’s example of NZDUSD:

    Attachment 10474

    It has rallied heavily, and believe me – there were many traders caught in short positions. Price has finally moved back to day opening, but I’m not sure that any short-sellers could benefit from that movement. You can’t enter short position (or long position, any position) if you don’t know your risk, if you are unable to calculate or estimate it. You can, of course, but it won’t be low risk trade, your risk will not be defined (don’t tell me that you know your risk because you have your stop-loss)

    So, in most cases shorting against such rally can be only reasonable when market is overbought and ready to liquidate to the downside. Such situations are pretty rare and this topic goes beyond our post.
    To avoid catching tops and bottoms, I recommend to switch between timeframes from time to time.
    What is cheap for one timeframe trader, may be expensive for other timeframe trader.


    Catching the «whipsaw»

    The second habit of beginner traders is to be aggressive after big price swings. Let’s say, we had news announcement and market reacted emotionally, We can see whipsaw with significant volatility.
    Most traders, who are bored with previous low volatility, think that market is going to move now more rapidly, more aggressively.
    But truth is that often market consolidates for 2-3 days after that, nothing happens, volatility goes down again. It’s very easy to be caught in such price action.

    Attachment 10476


    «Trading near support» (resistance)

    Third habit is too much reliance on horizontal lines that are considered to be support or resistance. In fact, support and resistance are often areas, not lines. I mean, real support and resistance areas, not local levels where day traders put their positions.
    When support/resistance «line» is already visible for everyone, it no longer provides good opportunity. Many traders can see those lines, they can calculate risk and they will enter either to the short or to the long side (trading breakouts or reversals) placing their stops beyond this line. So, a lot of orders will be concentrated near those lines, and market will not have reason to leave this level – the more liquidity it has near certain level, the less reasons it has to go away from it. The most expectable scenario is «whipsaw» near such «levels».

    Attachment 10475

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  2. #11
    Trader lawners1791's Avatar
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    learn of more with the profile with the market chart and to gains of the good help on the analytics with the useing of the good system as by the selection of the past evaluation. to broaden the view on appealing the request of the tasks on managing the run of the work with the trading on to approaching the best of options on defining the good signals with the order.

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    Trader dkarev's Avatar
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    there are so many reason that lead to traders struggling to make profit in this business before any dine can be made in this business when trading the market we need better understanding on the market,the more knowledge we have on this business will tell if we are gonna be able to make something in this business when trading the market.emotional trading is one thing that kills traders.

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  4. #13
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    Quote Originally Posted by dkarev View Post
    there are so many reason that lead to traders struggling to make profit in this business before any dine can be made in this business when trading the market we need better understanding on the market,the more knowledge we have on this business will tell if we are gonna be able to make something in this business when trading the market.emotional trading is one thing that kills traders.
    Well, i've seen a lot of traders keep struggling in this business after all so i know surely what are the emotions they have in this business whether they feel the despair or even the hope form here. But then again, at the very least all traders will surely need a lot of knowledge in order to understand the fundamentals they can get from this business better.

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  5. #14
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    [lang=ar]This is a good education tools and I am trying to get lesson from it. I faced many problems with such a situation and I hope this lesson will help improve my skill to this effect. Even I cannot able to take appropriate decision in the appropriate time which causes huge burden in my trading. Trying to improve the situation, This lesson is very effective to me.[/lang]

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    Trader lawners1791's Avatar
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    yes i guess so with the mention on to challange of the good work as by the most of the volatility of the market chart on to earning by the swings of the directions on returning the chance with the offers on to concerning the good opportunity with the flows of the market. with the focus also on managing the support on entrance as the better with the confronts of the different confirmation of entering by the precise of options.

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  7. #16
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    Quote Originally Posted by maao2004 View Post
    [lang=ar]This is a good education tools and I am trying to get lesson from it. I faced many problems with such a situation and I hope this lesson will help improve my skill to this effect. Even I cannot able to take appropriate decision in the appropriate time which causes huge burden in my trading. Trying to improve the situation, This lesson is very effective to me.[/lang]
    for newbie the most important is to gain knowledge about the forex and they should practice in demo account. Practicing in demo account makes them familiar with the market environment so that thet are able to understand the market conditions, market movements and so on. So, for newbie i would like to suggest that they should start with demo account

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  8. #17
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    Quote Originally Posted by Value trader View Post
    Selling «expensive» and buying «cheap»

    Most popular version of this principle is «buying bottoms» and «selling tops». When price suddenly breaks out from some range (say, to the upside) and starts to move rapidly, most traders will sell against this rally. That’s an instinct. If we’ve seen before small volatility and absence of significant price action to whatever side, we tend to deny breakout, we treat to new prices as «unfair» and rush to open a trade. Why in this case most traders are in hurry? They thing that current price action won’t long last and price will quickly drop back to the previous trading range.
    yes, it is so easy to claim that traders pick the up and the bottom of chart, but how we can know that those chart indicate the peak, peak of the bottom, and peak of the up. How can I determine it? Are using the candlestick is the answer? This hard to do. Determining the peak

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  9. #18
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    Quote Originally Posted by ngalapreceh View Post
    for newbie the most important is to gain knowledge about the forex and they should practice in demo account. Practicing in demo account makes them familiar with the market environment so that thet are able to understand the market conditions, market movements and so on. So, for newbie i would like to suggest that they should start with demo account
    By practice on Demo account they should watch market carefully and try to pick up right trade set up,most of the time traders buy or sell at that level in which market totally go against them because market already reached it's highest/lowest point,so choosing right trade set up is much necessary for traders..

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  10. #19
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    I agree with the post very useful for every transaction. We've learned that we can not know, to make money here. So we need to learn, and we must work hard to gain. We need to learn from our mistakes and we must be careful to deal with. Again, we must remember not to make the same mistake.

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  11. #20
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    Thoroughly engaged on an entry spot unquestionably is very great All details deemed. All traders need to really understand that entry amount in this Group is really a issue which we in essence have to concentrate with. After which in regards for the resist region along with the steering could potentially be The reason by which we could make the technique or menace administration. And Absolutely because of that we are able to figure out just precisely the amount kilos We are going to gets a Fee in an individual shot.

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