Over-trading in the currency exchange market is the singular biggest reason most traders fail at forex trading. There are different causes of over-trading. It is often linked to over-confidence brought about by having series of purifying profiting trades; it can also be caused by not having a proper trading strategy. Not using a strategy is similar to gambling in the market. You just enter and exit randomly. Fx Trading is no walk in the park.
Not knowing how to deal with risks in the foreign exchange market puts your trading account at risk of being blown. When you cannot determine at what point to stop-loss, for instance, you may end up losing much more than you can handle. Knowing what point to set as risk tolerance is entirely different from actually setting a considerable risk tolerance level.
Many traders have a faint idea what capital preservation entails. Not understanding this aspect of trading results in unfavourable consequences in the forex exchange market. Capital reservation is analogous to sniper shooting in the military. Just as a sniper has to determine the best position and time at which to shoot, using the least possible amount of ammunition, a successful trader should execute a trade at the most favourable instance.
As many beginners start trading in Singapore; In so much as one should be informed about economic on-goings to make better trade decisions, following the news sometimes proves disastrous. There are times when a major event is expected to cause an uproar in the market but at that time, the opposite happens. Trades are usually delayed till after the news but then, executing a trade before that time will ensure that it is in the market already. Most often times than not, the news has little significance in an actual trade.
Having too many sources of information about foreign currency will result in confusion and may hinder you from taking actions. When your actions are influenced by too many sources in the money market, you may become inactive because of too many and contradicting speculations. One advice I give is to trust your instincts in most cases be it whether you’re trading the currency exchange or doing Commodity trading.
Compared to buying stocks in Singapore or trading the SGX Singapore exchange or while monitoring Singapore stock price, the forex exchange or forex trading has much higher volatility and you could potentially lose all your capital if you are not prudent with your risk management. Singapore Stock market trading has lower volatility in comparison to Currency Trading.
When a trader starts a live account with little money, the chances of success are a lot slimmer. First, the profit will be too small or insignificant. When a loss is made, it becomes too evident and such account easily gets blown. It is not advisable to begin live trading with any amount less than $500. If for instance, you cannot afford $1,000 in your live account, it is best to stick to demo trading till you can to maximize your chances at succeeding.
This point has been stated before, but skills should be reiterated. Some traders place their stop-loss, driven by greed. The purpose of stop-loss is to control loss amount. However, when improperly set, it could plunge a bad sale into failure very early into the trade.
There is a flood of forex trading strategies, too many forex course Singapore and countless trading courses out there. When traders cannot follow through on a strategy, or act and trade on impulse, risks are not effectively controlled and the negative consequences of not following through cannot be overlooked on Forex Trading Singapore.
Patience is a valuable trait of successful traders. It’s what makes a trade successful. Having the patience to properly study a chart before arriving at conclusion can save a lot of stress and mistakes later on. Patience also allows traders to follow through on proper techniques and strategies.
Not understanding the system before effecting trade leaves room for mistakes and miscalculations. The consequences manifest as random trade performance. Before you execute a trade, ensure you have a working understanding of the system. This is usually the first step taken to ensure the trades are properly executed and turn in a profit. Be it Commodity Trading or currency Trading, Day trading or in other words, Fx trading, in Singapore, is no easy task. The profits in the currency exchange market can be glamorous at the front but the majority do not see the losses too.
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