5 reasons to lose money in the CFD trading business
Investors have tried to avoid losing trades in the past. They have created a complicated trading method with which they can deal with complicated variables from different angles. But all of the hard work of the Singaporean traders has been done in vain. No one can avoid losing trades. You have to embrace this truth that losing trades will become a part of your business and start taking trades in the real market. However, with some advanced techniques, you can improve your success rate by avoiding some of the common false signals. Let’s learn more about these techniques.
Greed and fear
Greed and fear are embedded in our DNA. When the market is too volatile, the traders become greedy but fear to execute the trade. As both of these issues rises at the same time, the end up taking the trades at the wrong time. Ignore the most common rules of investment and take a high risk to earn more money. But this is not the way to execute the trade in the CFD industry. You must learn to take your trade by assessing the risk factor without greed and fear. Emotional attachment to your trading career will bring disasters. So, learn to control these two inborn instincts and protect your capital.
Trying to become the big players
The rookies often try to act like the big players in Singapore. But to become a big player, you have to invest money, time, and effort. You can’t expect to trade like pro traders at the Saxo Bank Group within the first few months. It shows the weakness of your skills. Instead of acting like a big player, you should start focusing on the major details. For instance, try to eliminate any attachment that has to do with your emotions. Learn to trade in a stress-free environment. Consider yourself as a learner and make yourself comfortable by reducing the risks in a trade.
Becoming addicted to trading
CFD trading can be very addictive. Nothing is more addictive when you can smell the profit potential at trading. But this lead to overtrading and the traders become greedy and fail to control the trades. They trade too often and thus the quality of the trades is always compromised. If you take the trade by compromising the quality, you should not be expecting to make money from this market. Some of you might be addicted to trading but we have a cure. Reduce the leverage and create an Excel sheet. The Excel sheet should tell you how much money you should risk per trade and how much you can earn. When you get the visual data from the excel sheet, you will not have the hunger to earn huge money from each trade. So, learn to trade with low risk and focus on the core elements of trading.
Trying out new techniques
The intermediate traders always try out new trading methods in the real account. They don’t realize the purpose of the demo account. If you trade with a new trading system in the real account, there is a high chance you will lose money. The system might be perfect but you need to give yourself some time to get sync with the new method. If you don’t the things properly, it’s just a matter of time you will lose all the money and blow up the trading account. So, be careful with the trade execution model and take advantage of the demo account.
Be confident with your system
You need to be a confident trader to survive in the CFD industry. If you lose confidence and take aggressive traders, it’s just a matter time of time before you quit trading. Trust your trading system and try not to make any stupid mistakes while taking trades in the real market.