Trading Basic's With Oliver

Don’t Make These 2 Major Mistakes!

O_aurthur
Publish date: Thu, 02 Jun 2022, 10:54 AM
O_aurthur
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This Blog is about basic of Trading like the terminology, Strategy, Analysis,etc,.
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Don’t Make These 2 Major Mistakes!

1. Undercapitalization

Insufficient start-up capital is the first mistake of beginners and often kills them.
 
I've seen merchants, including me, inflate their entire merchant account within the first month or week. Damn, I broke one of my accounts in thirty minutes!
 
You will lose your business capital even before you have time to learn the right business.
 
This often happens to start-ups:
 
  • They do not have enough knowledge and experience in business. They are not familiar with the principles of risk management.
  •  They minimize the risks associated with setting them up, leading to impulsive and often costly murders.
 
Another habit I see among new entrepreneurs is the use of tight stops on small parties and even on small business accounts.
 
The use of small commercial plots is not a death knell for novice accounts, but the use of small and narrow stops is possible.
 
By using short and tight stops, you will increase your chances of hitting the stops more often and your total loss will consist of many small losses. Your trading account should be as large as possible to adapt to market conditions and provide the necessary flexibility in making trading decisions. Position size is important, remember?
 
The size of your trading account is another tool of your trading account.
 
As with any business, you need to make sure you have enough money. Don't try to reduce your risk by investing only a portion of your available business capital. Find yourself well, but use good money and risk management!
 

2. Overtrading

The violation is when (in the hope that you get the highest possible profit) you open a large position consisting of multiple lots.
 
Given the average market activity, you can easily lose half or even all of your trading capital.
 
This problem is sometimes directly linked to insufficient business capital.
 
But this is more likely due to the fact that the trader does not know the principles of money management, which means a lack of ability to properly control their trading capital. Your business capital is used to make a profit. You have to treat every dollar like a newborn baby.

 

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