By Amber Kevin
Most of the newbies ask help from the other traders in the Forex market. Generally, novice investors try to improve their skills using a demo account. But without working on the real platform, it is very tough for the newbies to understand the real market situation. Today, we will try to dissect the issue a bit more about why they should not do Day Trading and what precautionary measures one may take to avoid it.
Emotional turmoil
Execution of the trades can be affected by the emotional turmoil, and beginners who are with a continuous involvement with it may feel drained emotionally. A newbie faces all the ups and downs of emotion with varieties of feelings. At the same time, they may feel hopeful or scared, excited or frustrated. Every trade may seem like a ride to the roller coaster by them.
Suppose, if you are a day trader, you can place 3-5 trades in a single day. All of these rides like roller coaster will consume the mental energy of you, and you may end up taking the rest in your whole day. Moreover, you can be very tired and become unable to struggle more. If a beginner continues like that you will fail to take the rational decision which will be the ultimate reasons for his loss in the trading.
Opportunity cost
Because of tight stop cost, sometimes your profitable trade may find a close, and you may find later the trades were going in the right direction and this can give you the feeling of losing an opportunity. After that, a trader can place another order, but his emotion that he could get something more in the previous trade will not go. The feeling of missing out on a good trade will stay for longer in your mind. Our aim is not to generalize the whole thing but share the real fact of what novice investors can face by losing countless profitable opportunities. And try to learn about price action trading strategy as it will help you to find the profitable trade signals in a much easier way. This will also help you to take advantage of the golden opportunity.
Losing the great opportunity may cost a great loss that cannot be counted in value. It will not provide you with any money, but your broker will get some extra profit from here.
Investors should avoid the execution of the trades in a shorter period. To get a better result, investors must stay away from short time trading and set a strict stop loss point. If he becomes consistent with the long-term, he can be able to increase the number of getting the winning trades and can earn a huge amount of profit faster cumulatively than the scalpers.
Management
Most of the newbies do not understand that buying selling of the financial instruments may comprise very little with the whole career of the investors. It is found that 70% of the success in trading revolves greatly with the proper management of the trades.
Newbies must conduct the market analysis properly and gauge the risk in advance. Without having a proper money management system making a profit within a certain period is very tough. If there is proper management for the execution of the trades, the chance of winning gets increased. But remember, the frequency of the trade has nothing to do with your profit factor. You should work hard to improve the accuracy of the trade signal as it will help you to earn more.
In conclusion, it can be realized by us easily that trading less can be more effective than overtrading. Being consistent with a specific goal with the practice of discipline can make our endeavor in the Forex platform successful. But being consistent is not that easy as it may seem. If we want to be consistent, we must set a timeframe.
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