Almost all traders whom I have guided , had a many misconception about the trading that gave me an idea of writing an article on the mistakes and misconception about the trading.
This article will let you know about the most common mistakes and misconception in the market about the trading and it will guide you to become a profitable trader in the market.
My aim to write this article is to stop the traders from repeating their mistakes.
Avoiding understanding price actions and depending on indicators.
Many traders read and try to understand the market through indicators only but I will say that it is a totally wrong practice for one who wants to become a successful trader.
This practice is mostly followed by the beginner trader. As the study of indicators is not at all useful it just gives the habits of reading and not analyzing.
I can say that it is one type of bad habit which stops your progress in the trading as it does not give you a clear idea about the market conditions.
Whereas if one is studying price action will be more knowledgeable about the market and will able to think on the trades involved in the market more clearly than one which depend on indicators only.
So it’s better to learn price action then reading indicators because it let you know exactly what is going to happen next in the market.
Once you learn price action then you will realize why it’s worth then reading only indicators.
Trading without understanding risk rewarding ratio.
Almost every successful trader knows about the importance of risk to reward ratio in the trade. The beginner traders must know about how to analyze the risk from the trade.
All the beginners know about their winning trades and only try to focus on profits without exactly finding the risk involved in the trades.
Due to which they land up getting failures in the trades, so I must tell you that before trading, know about the risk to reward ratio and then trade , also trade only if you find it as a proper trade setup.
You can just aim to take rewards two times the risk on the trades which will help to give a consistent profits from the market , beyond which it can be harmful or more risky.
Not adjusting the position size.
Most of the Traders don’t pay attention to the position size. Actually it is the main key of success. Understand the importance of position size and balance your position size accordingly.
Most of the traders set a stop loss to trade in their all the setups but actually a stop loss should be set for most trades with a real and practical stop loss distance.
For understanding in detail about how to adjust the position size in the market you can read the articles based on position size.
Trading at lower time structures.
When it comes to a price action I say that price action with higher time structures are better to understand then at lower time structure though they are time consuming.
I have come across many traders who tell me that they have been trading since 10 years but only for 15 minutes , 30 minutes or sometimes even less.
But for those studying price action of such low times will not help to become a successful traders , because I can say they will have only half of the knowledge about the trading.
Trading with higher time structure gives a detail and clear idea about the market strategies and helps to develop a trading plan and you can become a master in it in less time.
Expecting for higher profits.
One of the human tendencies is that they are not satisfied at any point of life and due to which their requirements or expectations are endless.
Same applies for trading also when they start getting profits consistently then they are not satisfied with that and just aim of making more and more profits.
The human behavior tends to keep hopes from the market all the time for the money from the market , but they don’t understand that market never behaves in a same manner it always changes its way.
So it’s better to aim of 2-3 times of profits of the risk involved because if it goes higher times than it , then it can cause problem if markets turns up then it’s really going to hit you in a very bad way.
Keeping your accounts capital safer is the most important , otherwise carelessness will let you close your accounts.
Learn Jayant’s LIFE CHANGING PRICE ACTION TRADING COURSE and find HIGH Probability trade setups in COMMODITY , NIFTY , BANKNIFTY and CURRENCY . Check Jayant’s PRICE ACTION COURSE . Take your Trading to the NEXT LEVEL using PRICE ACTION STRATEGY.