Trading in securities is a good way to earn extra on the existing money we already have.
This sounds great and earning through trading is really a great idea. But if we keep certain things in mind before doing it. Because putting hard money into the market is extremely easy but making money out of it needs some cautious steps for managing the risk. Risk management is a step where risk is managed to optimize the possibilities of losses. There are many strategies which we can follow some are I am listing here
1. Trading without Stop Loss
Always use Stop Loss while making any trade. Trading while using stop losses minimizes losses which will directly save the money we put at risk, indirectly minimize risk too because if the trade goes another way then expected then it can cause the loss which will be an unnecessary loss for the trader. This is a money saving technique it saves traders money from touching the point we do not want our trade should touch. Stop loss exits your trade at the losing trades immediately as your money starts to go in vain. If trading is done without Stop loss then the loss trader got, due to going the trade another way we did not expect and want to go. In short stop loss is used to control our losses.
2. Putting money on losing trades-
We saw the relevance of using stop loss above now let's go on next step.
Adding money in losing trades now is same as to boat on the sinking ship.
The trade is already going in the loss and with the expectations of profit putting money in. Now, this mistake generally traders do. Now, this mistake not only incurs losses but incurs extended losses. So avoid putting money on losing market while expecting that now things will go your way.
3. Putting whole money in one trade-
Usually, traders do this they put all their money in one trade now this can turn into huge losses.
Because putting whole money in one trade is a huge risk. This is not effective risk management as risking complete money at one egg is not worth the risk we are taking for it.
So make a Thumb rule for trading always diversify your money putting it at one trade is a mistake you are making.
4. Trust blindly
Now trusting blindly is another mistake. Traders get any recommendation or any signal and they put their money on, now what sound this to you?
If asking me frankly then it is a foolish idea to do. The reason what it is making me say is you are putting your money into the market while trusting someone else and the person you are trusting has nothing to lose but you are keeping your money at stake, losses will be yours not his. Now I am not saying do not follow your broker or signal provider but at least analysis is mandatory. Because it is business putting your position at stake on the blind trust only does not sound a great idea.
5. Trading without planning
For earning good profit a systematic plan is needed. Without brainstorming hitting trades is another mistake a trader can make. So whenever you plan to trade make a written plan Writing things is easy to follow rather than keeping them in mind.
For Planning you can take the services of Best Forex Signal Provider who can help you in planning your portfolio and risk appetite.
Above some mistakes have been mentioned which generally traders make while trading. If traders take these mistakes in the mind and avoid these trading they can earn more as they are earning in the present scenario.