Silly Mistakes CFD Traders Make
There are certain silly mistakes that all traders have made at some point in their trading careers, even though there are simple techniques that can be used to avoid them.
Is it Buy, Or Sell
It is not unusual for a trader to push the wrong button when entering or exiting from a trade. It is most common to push sell to get out of a short position, when you really meant to buy. Sometimes it just gets so confusing, so instead of being out you end up with double the quantity.
It is easy to catch this mistake by making a habit of looking at your open positions immediately after placing the trade. If you find that you have made this mistake it is easily rectified at low cost if you act now. Not realising that you have an open position could be a very costly exercise.
Forgotten Stops
Often a trader will decide to exit a position at market, because they do not like the current price action. But if they have the discipline to always use stops then the stop order must be cancelled after the trade is exited. If it is left open the order can be executed and it could be many hours before you realise that this has happened. The trade may or may not go in your favour, how it plays out is an unknown, but certainly not something you want left to chance.
Before exiting the trading platform at the end of a trading session make sure you check your open positions match your stop loss orders to avoid any surprises when you next enter your trading platform.
Was That $10000 or $100000
If you have calculated the correct position size, it is still possible to get it wrong by adding on, or forgetting an extra zero. Too many zeros can results in large losses and too few zeros can dramatically reduce your profits.
By going to your open position order screen you will be able to pick up whether the order you placed was correct.
Avoid Placing Your Stops Too Tight
A very common mistake made by traders is to use very tight stop losses. If the stop order is very near to the current price it can be hit by the normal fluctuations that occur. Tightening the stop loss does not prevent losing money, it often creates it.
Stops must be placed far enough away from the price action to exit you from a position if your trade view turns out to be wrong. Give the underlying share room to move to avoid getting caught by this CFD mistake.
Discipline Is Essential
Even experienced traders can be caught out by chasing a share as it moves rapidly. While it is more common amongst people new to trading it still can catch out the more experienced traders. Following this strategy is usually a recipe for disaster and also can be one of the hardest mistakes to overcome.
The market offers an unlimited supply of trading opportunities, far more than you could ever possibly trade. If you miss a trade today, there will be another trade along soon enough. By following a trading plan you can avoid getting caught by impulsive trades, which can prove to be costly.
Avoiding these silly and costly mistakes will certainly improve your trading results. It is not necessary to throw away money unnecessarily. - 23159
Is it Buy, Or Sell
It is not unusual for a trader to push the wrong button when entering or exiting from a trade. It is most common to push sell to get out of a short position, when you really meant to buy. Sometimes it just gets so confusing, so instead of being out you end up with double the quantity.
It is easy to catch this mistake by making a habit of looking at your open positions immediately after placing the trade. If you find that you have made this mistake it is easily rectified at low cost if you act now. Not realising that you have an open position could be a very costly exercise.
Forgotten Stops
Often a trader will decide to exit a position at market, because they do not like the current price action. But if they have the discipline to always use stops then the stop order must be cancelled after the trade is exited. If it is left open the order can be executed and it could be many hours before you realise that this has happened. The trade may or may not go in your favour, how it plays out is an unknown, but certainly not something you want left to chance.
Before exiting the trading platform at the end of a trading session make sure you check your open positions match your stop loss orders to avoid any surprises when you next enter your trading platform.
Was That $10000 or $100000
If you have calculated the correct position size, it is still possible to get it wrong by adding on, or forgetting an extra zero. Too many zeros can results in large losses and too few zeros can dramatically reduce your profits.
By going to your open position order screen you will be able to pick up whether the order you placed was correct.
Avoid Placing Your Stops Too Tight
A very common mistake made by traders is to use very tight stop losses. If the stop order is very near to the current price it can be hit by the normal fluctuations that occur. Tightening the stop loss does not prevent losing money, it often creates it.
Stops must be placed far enough away from the price action to exit you from a position if your trade view turns out to be wrong. Give the underlying share room to move to avoid getting caught by this CFD mistake.
Discipline Is Essential
Even experienced traders can be caught out by chasing a share as it moves rapidly. While it is more common amongst people new to trading it still can catch out the more experienced traders. Following this strategy is usually a recipe for disaster and also can be one of the hardest mistakes to overcome.
The market offers an unlimited supply of trading opportunities, far more than you could ever possibly trade. If you miss a trade today, there will be another trade along soon enough. By following a trading plan you can avoid getting caught by impulsive trades, which can prove to be costly.
Avoiding these silly and costly mistakes will certainly improve your trading results. It is not necessary to throw away money unnecessarily. - 23159
About the Author:
Jeff Cartridge is the author of Supercharge Your Trading with CFDs and co-created the website LearnCFDs.com Discover How to Triple Your Profits With Less Effort CFD Trading Strategy
posted by X - Men @ 2:48 AM
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