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How to avoid the loss of funds in the transaction?Regardless of experience, every trader needs a plan. The key factors that can help the transaction become safer, they are the necessary strategic minimum requirements to ensure stable income and avoid unpredictable losses. Why Do Traders Fail? Let's take a look at the top reasons why traders lose money: Trading is a complex process. Trading strategies require discipline and precision. Even with the best ideas, some traders can forget to act systematically. Traders can be reckless. They give up doing market analysis, don't bother with stop loss orders, and forget about the rules of risk management. These all lead to mistakes and bad deals. So how to avoid the loss of funds in the transaction? 1 Don't build positions with huge volume If you are unsure of market movements, focus on at most one or two trades in a session. In the case of a small order volume, it is more controllable to track and find out various opportunities. Please note that some factors, such as slippage (the difference between the expected price of the order and the actual execution price of the order), are unsolvable and cannot be considered in advance before the transaction is opened). 2Using Stop Loss and Take Profit To reduce the risk of losing your money, you can use a stop loss order. They protect you from losing more money than you can afford. As for take profit, the principle is similar -- it will automatically close the order when the price target is reached, thereby locking in the profit. Therefore, taking profit will help you get out of the market immediately when the market price is right, so as to maximize your profits. 3Use reasonable leverage By setting a wider and reasonable stop loss, smaller leverage will allow each trade to have more breathing room, thereby avoiding higher capital losses. High leverage will blow up your trading account faster when the market trend goes against your expectations, because a larger lot size will make you face higher losses. 4. Pay attention to important news The market can change its trend at any time due to news or even rumors. Staying informed is key. All traders need to follow up all kinds of news throughout the trading hours. Let's say you realize that a news release will affect the direction of your position, but you're not sure which direction it will be. In such cases, you should provide maximum protection for the position you open (set stop loss, take profit, and in extreme cases, close the position before the release of the expected news). 5 Don’t Trade During Low Liquidity Hours You need to be aware that illiquid trading instruments tend to have wider bid-ask spreads, higher volatility and, thus, higher risk for the trader. Therefore, trading in a cycle with little liquidity will face the possibility of high capital losses. 6 View multiple metrics It is best to make your long/short decision based on several technical indicators. Indicators and other tools in technical analysis need to corroborate each other. Combine two or three different types of indicators. Your trading strategy can also rely on candlestick and trend chart patterns, as well as the use of golden section tools. In this way, the system will provide you with signals with a high probability of success. If you use such a strategy, combined with a stop loss and the correct risk/reward ratio, then you can avoid losing money in your trades. 7 Control Your Emotions The most successful trading comes from confidence and calm. Your fear of losing money, or your desire to make money with your trading instruments in the precarious state of big news, can get in the way. Make sure you keep your emotions in check and use tools like stop loss and take profit orders to make objective trading decisions. If it helps you, please like and follow.
FOREXCOM:XAUUSDEducation
by Gina-lovestotrade
How you trade impacts how you feel 😀It's no secret that managing your trading psychology is the biggest challenge in your trading journey. Some say it counts for 80%+ of what's needed to be successful. I totally agree... However, there's a key factor in this for me. How you actually trade to start with! Correct trading psychology starts by realising you need a strategy. If you're guessing with no real plan or risk management surely you're going to be more stressed and overwhelmed than a trader who has a plan, has the data to support his strategy and manages his risk? So once you get your system/strategy nailed on, this in turn will help manage your fear. Greed is another factor, but this comes from your expectation. Expectations and reality need to be aligned with one another. Your expectations can come from your data and your testing. But if you've skipped this step you'll be chasing unrealistic expectations. Not just in terms of % gains, but in understanding your drawdown periods too. So in summary both are completely related. You give me a trader that's really struggling with his trading mindset and fear and within a month they won't be feeling the same way. Likewise, if give me a trader who is calm and in tune with his system and emotions, we'll quickly change this by getting him to trade randomly! No trading psychology means no trading strategy, No trading strategy means no trading psychology. These two elements are so intertwined. Thanks for looking at my idea. Darren 👍
Education
by pow_removetheguesswork
2
Why do traders mostly lose? Point of viewFor 3-5 minutes while going through this forget what you know about trading. First thing is : Let's remember our goal, every successful action/plan started with a clear goal that led the way: In our case it's profit When starting to trade seeing the numbers go up and down plays with your head and emotion quickly tempting you with the unlimited potential at your fingertips. Even experienced traders that had some lucky streaks forget that the wanted end result is simple - to be in the money, meaning, making profits consistently. In order to secure our goal of making profit we need to first start with remembering this is not a 'get rich quick' scheme and there is no magic - A big bunch of money won't fall on your head out of nowhere, at least not consistently. Now - remember this : It's a lot better to be consistently profitable than to have a series of a few winning streaks . With this in mind, it's great if you would put up a sticky note on your screen reminding this - As at times it gets hard keeping sight when numbers run wild. I see many traders look at between 5-10 crypto currencies, 3 commodities and 10 currency pairs - Deciding based on a variety of different things what to trade on every time. This way of action has no structure at all - Which makes it very hard to reach a certain target: profit. It is necessary to have focus, structure and a plan with a single minded mission: PROFIT. But not just any profit - smart profit, a profit that was a result of planned action. So how do you make a plan? The easiest way to effectively craft a well thought out plan is to focus on between 2 to max 3 instruments Learning the range, price action and tendencies of 2-3 instruments can be done within a few weeks going through 1h, 4h and weekly time-frames and determining the short-term and long-term projections of each of the 2-3 instruments. Once you start seeing the patterns and understanding the price action continue by implementing what you learned on the instruments on a demo account testing a possible strategy that relies on clear idea of what to do with every possible scenario. You may not get it right with the first strategy, so try others until you find one that shows consistent results - while mastering the 2-3 instruments you have chosen and continuing to following up on a daily basis on relevant news, changes in trends on short-term and long-term projections. For me - Because I've dedicated years trading and following Gold and WTI , learning how and why it moves - I prefer trading a swing trading strategy, keeping trades open between 3 days to 2 weeks usually, this puts my bigger picture understanding of the instruments into true effect The difficulties you will find while searching for your strategy are - *Greed *Fear *Lack of patience *Lack of discipline in plan Don't let them in - Remember your plan and one and only goal : consistent profit! Thank you for reading, Let me know what you think and what you would like to hear more about :D
BITSTAMP:BTCUSDEducation
by Exactus
3
My 10 Rules before Taking a Trade.1 : Dessiner les Niveaux clés et la Tendance. (a) Trend and Supports/Resistances Majeures. (12-16x timeframe) (b) Trend et Support/Resistance on shorter term(6 or 8 time short). Draw the most recurrent Fibonaccis retracements or/and extensions. (c) Check Action Price on your trading timeframe. Draw short-term fibos. 2: Find a Signal Only valid on KEY LEVEL. Ideally respect the trend, with exception of reversal trades. No signal. STAY FIAT. Ignore Signals if : -Low volume. -Complex retracement. -Sloppy action price. 3 : Find Confluences. Is this scenario direction or targets the same if i use different projections? Different Bias? Does market profile validate my fibo support? Confluences help classify your potential setups by quality and help reduce exposure and overtrading. 4 : Plan the trade. We have the entries, the targets. Congrats that was the easy part, now you need to find invalidations, partial profit targets and when to rise your stops. For advanced trader, time to plan your time related stoploss, potential re-entries and how you plan to ladder your entries. Reminder : The closer your stop is, the best is your ratio and so are your earnings, in the long game, ladder entries will boost your profits. 5 : Calculate your REALISTIC Risk/Reward. No volume on the breakout of your triangle? no reaction on your fibo level? Trump is on a twitter fury and excite the dumb money.Most of the trades are not gonna go like you planned, you're gonna need to get out or reduce your exposure for many reasons. Being optimistic is good day to day life, when trading it's the opposite. Be Honest and Pessimist. 6 : Define Sizings and Maximal Exposures. Up to you, i personnally use 1% for my best setups, when i'm not so confident or trading an aggressive setup probably more like 0.3%. I usually ladder my entries with 4-10 positions. Still working on it. Reminder : A drawdown >25% brings a risk of ruin between 0.5 to 1%. My 10 years experience in risk/reward management 2 cents. This one percent HAPPENS. A human common bias is considering small percentage as irrelevant. They are very relevant, get other this bias. In my opinion : <1% risk per trade is MANDATORY if your capital is consequently above your cash flow. 1-3% if you cash flow afford you to rebuild your capital quickly. >3% if you are masochist. 7 : Mental check-up Am i calm? Do i want to trade this setup logically or am i pushed by Greed or desire of Revenge? What are my recent results? Am i emotionally involved? What are my recent results? Winning Tilt : Care of Overtrading, loose Stop losses, passing by mandatory partial profit. Losing Tilt : Care of Stops too tight, freezing and undertrading. 8 : Accept uncertainty and pending loss. A drawdown is normal even to very successful traders, for exemple with 50% success rate, you are gonna frequently have a 16 consecutive losing streak. Why this trade would be exceptionnal? Don't take this trade if you are not ready to lose 16 times your stop without blinking, without complaining. If you find yourself doing that, then it's a sign you are too exposed. you DON'T HAVE to risk 1% per trade, especially if you haven't proved you are a winning trader with a long history of profitable trades. Accept this trade is almost irrelevant and part a of a bigger picture. A lifetime of profitable trades that are going to increase your capital. No more no less. 9 Backtest before exposing yourself. Is this trade part of my bigger plan? Am i in my confort zone? Am i factually profitable with that sort of trades? If yes, Green Light. If no, don't panic, this work is not worthless. It is very valuable to open ourselves at other technical analysis, other instruments. But no so recommended to burn some bills on it. Time to Paper test this setup, or trade it on a demo account. Make stats on it, is it better than your actual strategy? Yes, you just made yourself richer? No?Smarter then..
COINBASE:BTCUSDEducation
by JJFF21
1