Forex trading has become the prime source of income for many people in Singapore. This investment business is worldwide accredited. Those who have the proper training and a strong mentality can adapt to the dynamic changes in this market. Adapting yourself to the investment business is a very tough task. In most cases, new traders become biased in favor of the profit factors and start placing random trades. Such random trades might end up with a big profit but think about the long term outcome. No one can say that they can live their life peacefully without knowing the ins and outs of the trading industry.
Considering the struggling trades in the world, we are going to highlight the top three common mistakes associated to trade placement. If you can fix the errors in your trading strategy, you should see a positive result.
Trading the minor levels
Trading the minor support and resistance level is only applicable to the high-frequency traders. The high-frequency traders are often known as the scalpers. So, if you wish to boost up your confidence level, you should not trade as a scalper. Remember, those who have extensive experience with trading businesses prefer scalping. So, the naïve traders should never try to test the scalping system. You have to draw the support and resistance level in the daily, weekly or in a monthly time frame. By choosing such a big time frame, you will get the unique opportunity to avoid the false spikes.
Lower time frame trading is considered as a risky trading strategy because the traders don’t have the skill to deal with the false spikes. They become frustrated as the market hunt down the stop loss. To avoid this problem, you should choose to trade a higher time frame.
Trading with the unregulated broker
Choosing an unregulated broker for their lucrative offer is a very big mistake. An unregulated broker might freeze your fund without giving you any prior notice. To avoid such complicacies you should choose Saxo as your prime broker. Try it out here and you will be more than happy to the quality of the trade execution. If you trade with a well-regulated broker, you are not going to experience any slippage with your trade exaction. You can trade the major news like NFP, internet rate changes, ECB press conference without facing massive slippage. Though they have stick rules regarding leverage, it will help you to protect your capital.
For instance, if you get used to a high leverage account, you will never understand the importance of risk management. With a few losing trades, you will become emotional and try to recover the loss with desperate actions. This will ruin the quality of your trade setups.
Avoid using the indicators
Those who are concerned about quality trade placement should avoid using indicators. The indicators should be used as your trade filter tool. In most cases, the traders get carried away by seeing the initial success rate of the indicators. After a few months they realize, it requires a wide stop loss to make a profit with the help of such tools. But if you ignore the readings of the indicators and try to trade the key support and demand zone with the help of the price action signals, you can see a significant change in your trade execution. Most importantly, you won’t have to use a wide stop loss.
Does that mean you have to learn price action trading? Of course yes. Without getting yourself familiar with the Japanese candlestick pattern, it will be tough to survive in this business. Start with the basic candlestick pattern and try to learn from the experts. Look for the reliable signals at the critical levels and place your trade with discipline. Once you become good at it, you won’t have to think about precise trade execution.