3 habits that prevent traders from making profit - Page 249
Page 249 of 249 FirstFirst ... 149199239245246247248249
Results 2,481 to 2,488 of 2488

Thread: 3 habits that prevent traders from making profit

  1. #1
    Educator
    Join Date
    Jun 2013
    Posts
    1,103
    Thumbs Up
    Received: 579
    Given: 189

    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

    Not allowed!

  2. #2481
    Trader layigold's Avatar
    Join Date
    Dec 2013
    Posts
    10,145
    Thumbs Up
    Received: 164
    Given: 90
    In forex trading , it is common to hear that trader should buy the low and sell the high or top but that could plunge a trader into a serious loss if his assumption of market making a top or low is not valid .The fact that the market has really traded down is not enough reason to place a buy order blindly , there is need to look for a good support level and confirm that the support really holds and then wait until you see a good buy signal based on your own trading strategy before taking any trade at all

    Not allowed!

  3. #2482
    Trader
    Join Date
    Mar 2017
    Location
    Biafra
    Posts
    11,775
    Thumbs Up
    Received: 58
    Given: 20
    Bad habits are very bad in trading and its likely to cause easy loss for traders who are not really careful. What should be our very concern about trading is to ensure we do everything it will take to manage risk and see we do not make wrong plans that would easily lead to loss. Profits is very important in forex and we should as well understand how we can make great gains that would lead us to survive. Making profits is what we need here and we must be ready to avoid bad habit that could cause loss.

    Not allowed!

  4. #2483
    Trader Azis Muslim's Avatar
    Join Date
    Sep 2013
    Posts
    5,514
    Thumbs Up
    Received: 280
    Given: 193
    Quote Originally Posted by layigold View Post
    In forex trading , it is common to hear that trader should buy the low and sell the high or top but that could plunge a trader into a serious loss if his assumption of market making a top or low is not valid .The fact that the market has really traded down is not enough reason to place a buy order blindly , there is need to look for a good support level and confirm that the support really holds and then wait until you see a good buy signal based on your own trading strategy before taking any trade at all
    I kept falling to this idea when I first traded my own money because it was the only thing that my manager taught me when I was working in local broker. That painful moment when I lost my money really changed myself and with my losing experience due to such habits, I was starting to learn new things more, lose more trades with new bad habits, then learned from them again until now I can fully protect myself from them and able to trade carefully and patiently.

    Not allowed!

  5. #2484
    Trader
    Join Date
    Aug 2015
    Posts
    12,807
    Thumbs Up
    Received: 122
    Given: 24
    Quote Originally Posted by Azis Muslim View Post
    I kept falling to this idea when I first traded my own money because it was the only thing that my manager taught me when I was working in local broker. That painful moment when I lost my money really changed myself and with my losing experience due to such habits, I was starting to learn new things more, lose more trades with new bad habits, then learned from them again until now I can fully protect myself from them and able to trade carefully and patiently.
    broker have not much issues here, there are some things which we need to check about trust of broker for safety of own funds otherwise we can do well here, in trading we can survive just if we have good experience if we have proper analysis and management, with these factors our personal behavior also matter, so do hard work and never try trade without these things

    Not allowed!

  6. #2485
    Trader Toyen's Avatar
    Join Date
    Apr 2018
    Posts
    7,692
    Thumbs Up
    Received: 40
    Given: 13
    Quote Originally Posted by naeem555 View Post
    broker have not much issues here, there are some things which we need to check about trust of broker for safety of own funds otherwise we can do well here, in trading we can survive just if we have good experience if we have proper analysis and management, with these factors our personal behavior also matter, so do hard work and never try trade without these things
    I do not like it when traders are blaming brokers too much, there are many of the trader's fault than that of the fault of the broker. I want you to know that i have read with many cases that traders will be alleging the brokers of manipulations, whereas it is the trader that did not know how the market is behaving always. In the situation like that, traders have to make sure that they are doing their trading with good brokers, but likewise try to outsmart the market condition by using stop loss and risk management.

    Not allowed!

  7. #2486
    Trader Silhouette's Avatar
    Join Date
    May 2016
    Posts
    2,506
    Thumbs Up
    Received: 41
    Given: 42
    Quote Originally Posted by Toyen View Post
    I do not like it when traders are blaming brokers too much, there are many of the trader's fault than that of the fault of the broker. I want you to know that i have read with many cases that traders will be alleging the brokers of manipulations, whereas it is the trader that did not know how the market is behaving always. In the situation like that, traders have to make sure that they are doing their trading with good brokers, but likewise try to outsmart the market condition by using stop loss and risk management.
    This case is totally different to what traders commonly facing while they're trading and got proper experience. It's not about brokers they're worrying because experienced traders knows it's not their fault. Those bad habits are coming from trader's own self and it's how we must fix ourself in trading and analyzing market better.

    Not allowed!
    rules made to be followed, not to be broken

  8. #2487
    Trader
    Join Date
    Aug 2015
    Posts
    12,807
    Thumbs Up
    Received: 122
    Given: 24
    Quote Originally Posted by Silhouette View Post
    This case is totally different to what traders commonly facing while they're trading and got proper experience. It's not about brokers they're worrying because experienced traders knows it's not their fault. Those bad habits are coming from trader's own self and it's how we must fix ourself in trading and analyzing market better.
    its not about broker but there are a lot of things which we need to know about broker as well, some time we can earn but broker can make issues for us for withdrawal and many issues, so make sure you have done proper confirmation about broker and strategy as well, so make sure you work properly for trading and validation for all things as well, earning is hard no doubt so learn it fully

    Not allowed!

  9. #2488
    Trader
    Join Date
    Nov 2017
    Posts
    7,129
    Thumbs Up
    Received: 37
    Given: 68
    Quote Originally Posted by naeem555 View Post
    broker have not much issues here, there are some things which we need to check about trust of broker for safety of own funds otherwise we can do well here, in trading we can survive just if we have good experience if we have proper analysis and management, with these factors our personal behavior also matter, so do hard work and never try trade without these things
    I think the cause of loses in forex trading can be known to be the fault of the trader than it could be the fault of the broker, I will say that we should be more concerned about how the traders handles the market, if we have a good trading strategy for instance that is based on the long term trading, I think we will even not have problem with the most worst broker.

    Not allowed!

Page 249 of 249 FirstFirst ... 149199239245246247248249

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •