For experienced Forex traders, daily trading can be a choice to gain more profits. For novice traders, it will be a loss. This will decrease the profit that the traders will gain.
Here are 5 common mistakes done by daily traders.
1. Averaging Down
Most of the traders often do an averaging down or open the new position when the previous is a loss position. An unexpected averaging down is too risky and emotional. The best solution to avoid the loss or drawdown is working based on risk management. If there is no signal available, opening a new position is not a must.
2. A Fundamental Trapping Position
Before coming up to this point, the highlight thing is about the volatility. Volatility is a statistical measure of the dispersion of returns for a given security or market index. Technically, in most cases, the higher the volatility, the riskier the security. It is often measured as either the standard deviation or variance between returns from the same security or market index.
Volatility is an important variable for calculating options prices.
For most novice traders, the most common mistake is the pending order buy stop and sell all together. Traders usually postpone the order buy stop and sell which affects high volatility ongoing with the fundamental news release. To avoid too high volatility, usually, traders have decided a profit target for each position.
3. Fast yet Thorough
The third thing is opening all of the fundamental news. Entry when the volatility is hazardous. To open this position, the trader usually waits for 30 minutes after the news release.
4. Too Risky for Each Trade
This happens because of daily trader tends to have a bigger lot to get more profits daily. This trader is supposed to set the minimum risk each day not more than 2% from the balance in its trading account.
5. An Unrealistic Profit
Because of the big lot, the risk/ratio reward which is too high is the common thing the daily traders do. A low time trading (under 4-hour-trading) will tend to have noise so that you have to be careful and be realistic to define your risk/ratio reward.
