People are amazing in nature. Once they decide that they will do something it’s really hard to change their decision. Similarly, when it comes to trading this very human nature causes huge loss to the traders. Some even consider trading as one of the most dangerous profession since the success rate is too low. According to the researchers, only 5 percent of the traders are making money. So by seeing the data, you should understand that how competitive the trading world is for the new trader. However, once you develop a solid trading strategy and gain enough experience you can easily make a huge amount of money. But most of the retail traders fail to train themselves in the perfect way due to some common misconceptions. Today we will focus on the most popular misconception prevailing among the rookie traders.
Trading more is the only way to earn more
The new traders in the financial industry often think that the more they will trade the better chance they have to make money. In the United Kingdom, the professional traders completely disagree with such a conception prevailing among the novice traders. In their point of view, the only way to make a huge amount of money is by trading less. According to them, the full-time currency traders should only focus on high-quality trade execution and they should do their technical analysis in the higher time frame. When you trade in the larger time frame then you can easily get a clear overview of the market. Most importantly if you use the smaller time frame then you will have to deal with lots of false spike and trading signals. If you are not experienced enough then this false spike even blow your entire trading account. So focus on quality trade setup and trade with discipline. Overtrading is not a bad thing only rather it is one of the most deadly mistakes in the investment world.
Demo trading is not useful
Some traders often think that demo trading is not useful. They simply ignore the importance of demo trading account in forex trading. But this is the best thing that the new traders can have in their early part of their trading career. In demo environment, you can trade as much as you want and there nothing to worry about it. If you wish then you can easily develop your trading strategy in the demo trading environment since you will have nothing to lose. The expert in the financial industry often considers the demo trading environment as the best platform for personal development. You should trade long enough in the demo environment and once you learn all the basic of this market you should switch back to real trading account for making a profit.
Indicators are the best way to trade the market
This is very common among the new traders that they think that indicator is the best way to trade the live assets. But the professional traders always consider it as their helping tools. None of the experts will ever place based on the indicators reading only since they know very precisely that if they do so they will only lose money. The best way to make a profit is to trade the key support and resistance level. So if you are new to this industry then make sure that you learn the perfect way to draw the key support and resistance level. Some advanced traders often use the price action confirmation signal to execute high-quality trades.so instead of depending on indicators try to trade in the clean chart.
Summary: There are many things that you need to learn to become a professional trader. To make a profit make sure that you are not suffering from the above mention misconception. Try to read as much as you can as it will help you to understand the market much better. Focus on proper money management and trade with discipline.