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Getting success in future trading needs avoiding several pitfalls as much or more than it does seeking out and performing thriving trades. Even professional traders don’t have any particular trading methodology that ensures success as a trader though there are certain rules to which you can strictly adhere to keep yourself ‘in the game’ long enough to get success. Be it forex or future market, with the widespread of Internet, today’s traders use future or forex automated trading tools depending on their requirement. But whatever you use, you must avoid getting into any pitfall that would restrict your chance to succeed as a trader.
Here are 5 of the most prevalent mistakes traders generally make in future trading.
- Failure to have a plan – Failure to have a winning trading strategy in place prior to a trade is being executed. If you don’t have your own plan of action in place upon getting entry into future trade, you won’t know when and where you need to exit the trade or about how much money you can make or lose.
- Insufficient trading asset or improper money management – It obviously doesn’t take a fortune to trade in future market with success. If you have less than $5000 in your trading account you can and do your trade successfully. But if you have more in your account, you can and do even huge loss in just a heartbeat. Part of your success boils down to proper money management and not running after highly risky ‘home-run’ type trades which involve too much money at one time.
- High expectations, too soon – Being a new future trader if you expect to quit your ‘day job’ and make a good living trading future in your first few years of trading, you may get disappointed. You must avoid expecting to become successful in the first couple of years of trading. It needs a lot of smart and hard work, calculations and of course firmness to get success in any field and endeavor, and trading in future market is no different. Trading in the future is not that easy and so ‘get-rich-quick’ scheme hardly works out.
- Failure to use protective stop – Using protective buying stop or sell stop upon entering into a trade provide you with an effective idea of about how much money you is risking on that specific trade, should it turn out to be a loser. A protective stop is an excellent money-management tool though not perfect. There is plenty of money – management tools in future trading that you can use to achieve success.
- Lack of discipline and patience – Though over-worked and often mentioned when determining what a successful trader lacks, even the most veteran traders won’t argue with the merits of these virtues. It is always recommended that you don’t trade for the sake of trading only. Let an opportunity of ‘set-ups’ come to you and then you act upon accordingly in prudent and proper way. The market will go in its pace and you can’t control it.
These are some of several mistakes that traders, especially the newbies make while in the market. Avoiding such mistakes would give you the prospect to become a successful trader.