Trading on the stock and forex market can be a nerve-wracking experience for even the lowly investor. But imagine if you had millions of dollars on the line – your life’s work?
The biggest mistake newbie traders make is failing to cut their losses quickly. It’s rather like what happens when somebody can’t give up on their gambling ambitions. They keep playing, hoping to win big, but are continually disappointed by the fact that luck isn’t on their side.
Here are some of the things multi-millionaire traders say about being successful.
Mistake #1: Trading Without A Strategy
Trading is a very competitive place, so not having a strategy can put you at a disadvantage, according to a trader who has made more than $11 million. There are many players, all of whom are willing and ready to take advantage of your trading mistakes and are willing to take your money. He recommends that the first thing any trader should do is find a strategy that gives them a shot at winning. Finding a regulated FX broker can help make trades faster and more reliably as well as give support to people who are new to the industry.
PixabayMistake #2: Not Being Patient
Although traders like to think that they know where the market is headed, very few of them actually do. That’s why it’s so important to be patient. Top traders, including the one that we have discussed, find that when they wait, they set themselves up for the biggest wins. Waiting gives you time to think about the best entries, the best time to exit a market and the best setups for overall success. Remember, your money can only ever be in a limited number of assets at a given time, so finding assets with the best chance of turning a profit is the aim of the game.
Mistake #3: Thinking Small Wins Aren’t Good Trades
New investors start off with modest ambitions, but according to one trader what has made more than $2 million, they start getting dollar signs in their eyes. He says that turning a profit of a few hundred dollars is a good trade. Investors shouldn’t go chasing mega money, at least to start off with. And they certainly shouldn’t get greedy. Every action needs to be calculated in order to set the investor up for the maximum likelihood of success. Remember, you’re not going to hit a homerun on every occasion: there will be times when a modest winning is all that the market can support.
Mistake #4: Refusing To Cut Losses
Tim Grittani is a trader who has made more than $2.2 million. He says the biggest mistakes he sees on the trading floor is new investors failing to cut their losses. All too often, traders are unwilling to admit that they made an error in their prediction of where the market was going, and despite the evidence, refuse to bail. Shorting a worthless company can still put you in hot water he says unless you cut your losses quickly.
