When it comes to Trading, it is very important to know the views of people with a lot of experience are. These traders give us a great hand for do not make a lot of mistakes and be successful with the recommendations they give.
1. Risking More than you can Win
Keep in mind that in Trading can some trades where you can lose a part of the capital, the important thing is to realize that our levels of protection and profit should be a very important point when we opening an operation.
The most recommended by traders with great experience in financial institutions, is to manage at least equal distances between Take profit and Stop Loss at the Entry Point, and it is advisable to make the distance from the Take Profit to the entry point be greater than that the Stop Loss to Entry Point distance, so that our trade can generate more profit if it is positive than loss if it is negative.
That is to say, if for each operation we set, e.g., double the distance from Take Profit to the Entry Point for the Stop Loss and we close a negative operation, we have to close two operations at Take Profit in order to recover the loss. On the other hand, if as a minimum we keep the same distance of our Take Profit to the Entry Point as the Stop Loss to the Entry Point, we can say that we need just more positive operations and thus generate profit.
2. Skip their Trading Plan
Always have a trading plan is important for any trader, it is a common guide of how to manage each stage in a trade. From analysis to closing and consolidated.
In the trading plan, you should not make the mistake of doing so and put it aside, since as a guide to our trading process, it respects our entire path of how to do both good analysis and handle capital in an appropriate way.
3. Trading without a Net
For Forex.com “You cannot watch the forex markets 24 hours a day. Stop and limit orders help you get in and out of the market at predetermined prices. This not only allows the trading platform to execute trades when you are not available, but it also makes you think through to the end of your trade and set exit strategies before you’re actually in the trade and your emotions get the best of you. Placing contingent orders may not necessarily limit your risk for losses.”
4. Do not Manage Emotion During Earnings
Emotions must be handled in all phases of trading, from planning to monitoring each operation because if we play against the trading psychology, we can take some actions that increase our risk and minimize our profit.
In the monitoring phase, many traders, regardless of their trading style, are caught by the uncertainty of a reverse when a trade is positive. This situation prematurely seeks to close many of their positions, no matter that they were born of an excellent prior analysis; which causes the expected value of the operations to be less and less because we are making the profit distance smaller.
5. Do not Register their Trades
It is advisable by all of the professional traders to have a complete record of trades. They argue that not being in contact with records and statistics of our operations, leaves us blind in our Trading failures and without knowing what we should enhance, on our best movements.
For them, make records in electronic tables or paper that talk about our best-transacted assets, the best trading sessions of our operations, the managed volume per operation or other numbers that show our operation in broad strokes; to be able to evaluate our performance, handle our failures and improve what we have done well.