Everyone wants to trade like a pro-trader. But very few traders know the perfect method of trading. According to recent statistics, it is safe to assume more than 97% of retail traders are losing money. If you narrow down the details, maybe 1% of retail traders in Singapore are leading a luxurious life. So, who are these 1 % of people? They are the ones who know the proper way to deal with the risk factors. They never take an unnecessary risk even though they have enough money to lose. Let's find some of the key reasons for losing money in trading.
False confidence
Having false confidence is a very big mistake. After knowing some of the tricks of trading, the rookies start to think they know everything about this market. Even after spending a few years, you might not learn all the important elements of trading. But if you take organized steps, one year will be enough to educate yourself properly. Never trade with false confidence as it can ruin your capital. Confidence is good but not admitting to the weaknesses in your trading method is a very big mistake.
Trading against the trend
To establish yourself as a successful trader, you should not try to trade against the trend. Taking trades against the major trend is a very big mistake. If you ever access the Saxo bank group learn center you will know why the counter-trend trading method is so risky. Let's say the long term trend in the GBPUSD pair is bullish. In most cases, the breakout will favor the long term trend. So, if you take the trade against the trend, you might have to lose most of the trades in the breakout.
Using the leverage in the wrong manner
Leverage trading account is blessings but a curse for the rookies who don't know the perfect way to trade. To establish yourself as a successful trader, you have to very careful about the risk management policy. Taking too much risk and trying to win a jack post is not the action of a good trader. A good trader always thinks about the safety of his or her capital. They never use the high leverage trading account as it increases the risk to a great extent. So, reduce the leverage to safeguard your capital.
Taking emotional steps
Taking emotional steps is very common in the trading business. Rookies become restless to recover the loss and break the rules. But breaking the rules and trying to earn some big profit never works. Emotional traders result in a big loss of more than 90% of the time. Even if you manage to become lucky for a few trades, you will develop a bad habit and blow up the account in the long run. Follow the safety protocols if you wish to change your life and take trading seriously.
Trading with the low-class broker
Choosing a broker is very important in your trading career. If you trade with a low-class broker, you will never get an accurate price feed. So if you trade with the price action method, most of the time you will lose trades. Due to a slight deviation in the opening and the closing prices, the traders lose big trades as the signal is not that accurate. Even if you make a big profit, you might not be able to withdraw your money. The broker might freeze your trading account without showing any reason. So choose a broker like Saxo so that you don't have to deal with such problems.
Conclusion
Success depends on the actions of a trader. You must have the mental courage to overcome the challenges of trading. Lose a few trades but don't take aggressive steps. Stick to the rules all the time.