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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. #31
    Registered user PetraFX's Avatar
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    This is my experience, and now I want to share it in this forum. Before opening myu computer and trading forex, I mean open a position in a pair, I sit in front of my computer and using a little time to reflect and make a question that I myself must answer it, can I make profit according to my target today? If I feel yes, I can then I make analysis and opening a position. And till now this is a good habit I feel in my daily trading.

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    Rookie mohabbat's Avatar
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    Quote Originally Posted by masud786 View Post
    I agree with you and your post is very useful for all trader. We know that without learning we never able to make money from here. So we need to learn and we need to do hard work for making profit. We need to learn from our mistake and we need to trade with carefully. We should remember that we don't make same mistake again and again.
    Well brother, learning is the first condition for every FX trader, but maximum trader specially beginner do not care to it first time , but when they loss some money then they try to move on study but I think first time we need to learn then we need to start trading, any way value trader explain us about 3 habit which very important to me , so I hope you must try to understand it.

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    Don't loss you hope.

  4. #33
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    Well i feel that these three points can also serve the other way round for different traders by helping them make some good gains. Thus, traders should always make sure that they can implement and develop these habits to their advantage such that they can be able to profit from the same. Hence, traders should always incorporate the good trading ideas in their trading routine for better money making process.

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  5. #34
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    anyone claimed we should not be dependent a lot more one particular the particular single series much like the assist or maybe the particular level of resistance in one particular price due to the fact often the market industry persist in varying between the zone from the price which can be bounded, thus therefore it's very necessary that you can take into account which zone in addition to deal when price escape the particular zone.

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  6. #35
    Registered user lawners1791's Avatar
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    yes the decision on working with the use on the different confirmation on the manage should left of the precise of the options on the chance with the submission of the risks to put by the order. that should lefts of more with the strength by the trader on sparring the good endures with the commitments on completing the target to close with the entries.

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  7. #36
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    I would add another two, more psychological. Because what you described is a bad tradign entry technique. But even traders with good a good trading technique (those who can buy low and sell high) can actually loose/or make very little. How?
    1) They either hold the position too long in hope of bigger profits, they get greedy. Eventually almost every win turns to loose, you just have to wait long enough....
    2) Fear prevails and they jump out of the market too soon, e.g. after the slightest movement which goes against them (which will often reverse in the direction of their trade right after they close it in small loss/ tiny profit).
    So even if you have good entry strategy, you need another vital thing, a good exit strategy, else you won't make money!

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  8. #37
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    So far any forex traders can control themselves finely in this market, there will be no limitation for them in the trading. What i know best is how the trader looks into the doing, when you are good with the doing, then you will fight your path towards the doing it carefully well to your advantage.

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  9. #38
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    you should practice discipline trade to avoid the losses in the Forex market . the good trader never do error trade that will hamper his trading life . the new trader some bad habit for their big losses in the Forex market . they are always try to make trade with high risk . this is reason of their failure .

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  10. #39
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    You are focus on selling or buying with the helps of indicators as well as support and resistance. I like to share in this moment that at first i am set up RSI level such 30 and 70. Then i am easily detect what way market is going also i am set up MACD. When market is touch 30 level then i am understand market is stay with support and i am place order with buy. Also when market is touch 70 level then i am understand that market is stay with resistance level also placing order with sell.

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  11. #40
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    Quote Originally Posted by Touhid View Post
    You are focus on selling or buying with the helps of indicators as well as support and resistance. I like to share in this moment that at first i am set up RSI level such 30 and 70. Then i am easily detect what way market is going also i am set up MACD. When market is touch 30 level then i am understand market is stay with support and i am place order with buy. Also when market is touch 70 level then i am understand that market is stay with resistance level also placing order with sell.
    In this , you mean the reversal trading skills should be used? And on the indicator side, they are for real trading based on the divergence of the market. No matter how you use, their will still be lapses in the trading, and the most a trader can do is to be very careful to focus on the smoothness of the curve first.

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