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The Forex market is open 24 hours a day and 5 days a week. Many novice traders often get fascinated with this fact that they can trade the market 24 hours a day. But by trading all day long you can never secure your financial freedom.
To be honest, if you do this then you are going to only lose money. This market is not for the impatient and inexperienced people rather this is the place for the experts. Many new traders in the United Kingdom have lost their entire trading account due to over trading. Those who are totally new in this industry might not understand about the term overtrading. Overtrading is nothing but placing too many trades without maintaining quality. In the world of finance without maintaining the quality you can never make money consistently. So let’s discuss in details why over trading is often considered to be the most deadly mistake.
Leads to poor trade execution
If you want to consider trading as your full time professional then you have many things to learn from the UK experts. Every single one of them trades the market with the high level of accuracy. They know very well that a single quality trade execution is good enough to secure their whole month profit. Those who over trade the market usually use the lower time frame. But as a trader, you should always do your technical analysis in the higher time frame. If you trade the lower time frame then you will have to deal with lots of false trading signals. Being new to this industry it will be almost impossible for you to identify which trade setup is genuine and which one of fake. So stop wasting your time in analyzing the lower time frame and focus on the higher time frame price feed.
High-risk exposure
Most of the new retail traders don’t know about the true fact of money management. They simply think that they should never risk more than 2 % of their account capital on any single trade. But in CFD trading things are not at all simple. For instance, if you execute 20 trades in a day and risk only 2% then you have a chance to lose 40% of account capital in a single day. And for this reason, most of the novice traders often complain that they are following money management yet they are blowing their trading account. Instead of assessing the risk in a single trade you need to consider the time frame also. Make sure that you are not risking more than 2 % within the 24-hour time frame. It will be hard for you to control the urge in the initial stage but if you are want to see yourself in the line of successful trader then this is the only options for you.
Extra mental pressure
If you want to make a profit then you need to learn the art of trading first. Those who don’t understand the real nature of this market is just creating extra mental pressure. In the world of economic crisis, no one will be there to help you. It’s your duty to go through all the online trading resource to educate yourself with the right trading knowledge. Some traders often buy indicators and bots to trade the market but these things will never help you to make a profit. You need to learn the three major forms of market analysis. Once you do this you can easily place quality trades your online trading account. But make sure that at your initial stage you are trading only with the virtual dollar.
Summary: The Forex will be always there for you but you might not be there to trade. So make sure that you are not over trading the market since it will put all your trading capital at great risk. Always try to find the quality trading signal by doing your technical analysis in the higher time frame.
To read more articles written by Dwayne Buzzell, visit his site: Forex Writer
