If you are a new trader in the investment world, then there might be potential issues you face while trading problems. Well, never be disheartened if you ever face problems because every newcomer starts by facing some difficulties and that’s completely fine. A new trader is just like a toddler who falls many times while trying to walk. As time passes, the toddler could win a race through constant practice.
Similarly, you can overcome the problems through constant practice. But, you must be aware that in actual trading, losing means a loss of capital and that’s certainly not desired by us. For that reason, we need learn some methods before we step into trading problems.
Starting a trading job is comparatively easy than any other investment sector. All you need is a good market analysis, some technical help and a bit of trading study. But, then why do many traders fail to make a profit here?
The answer would due to lack of applying proper methods.
Today we will be discussing some common problems that you might face in your profession
1.trading at a breakout
Many traders in Hong Kong often trade their shares whenever there’s a breakout in the ascending of descending triangles. We know that there are a handful of reasons for doing so. One is to minimise the risk of losing while the other is to maximise the amount of profit.
However, you must also realise that a price breakout can also deprive you of a better deal if you have no patience. So, it’s always better to wait for some more time to understand the market before you make your trade. To learn more about breakouts, click here and learn from the top traders in Hong Kong.
2. Taking the excess risk
Traders usually take risks of up to 2% per trade. So, if you are taking a bigger percentage of risks, you might be making a mistake. Again, if you trade with leverage, be sure to calculate your risk-reward ratio. If you have a leverage of 1:10, taking a risk of 2% per trade might be the wrong decision. This is because even though you are bidding with an amount 10 times of your original capital, losing the trade would mean the amount of money lost is twice your owned money. In that case, your broker will confiscate your account to prevent you from trading.
3. Not setting a stop-loss point
The trading market is all about probabilities. You never know what is going to happen in this game. Even if you predict a situation, there’s no guarantee that it will come true. That’s why it is very important to set a stop loss point before purchasing your stocks. Then even if the market condition is not in your favour, your loss amount will not cross the margin you set. But, many traders often don’t apply stop-loss point after their purchase which can deliberately lead to bigger losses over time.
4. Trading half-heartedly
Even though we say trading is a child’s play, it doesn’t mean you will take trading profession lightly. One of the main reasons why many traders fail is that they don’t know when to work hard in trading. Since trading is all about case studies and speculation, it is constantly in need of thorough monitoring. So, if you are not working hard, you can’t complain about not winning.
5. Not choosing the right trade
You must remain aware of the fact that no matter in which market you are trading, it is not going to provide you with top-notch trades every second. So, it is useless to take comparatively bigger trades you are incompatible with. As a result, these trades have a lower probability of working with you and you are likely to lose. Instead, you should try to look for trades that align with your trading type.
You are the owner of your trading profession. You decide what measures you need to take to make ends meet. So, analyze the trading problems you are facing and look for answers. That way, you will remain unbeaten in the market.