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7 major mistakes novice traders make
99.99% of traders at the beginning of their path to profit constantly do the same actions and lose money over and over again until they make all the mistakes from this article
Aug 14, 2021
5 min read
Peter JanssenMarket expert

No matter how special a novice trader may think he is, he will still act like a beginner and step on the same rake. Even experienced traders sometimes make this mistake, this cannot be avoided while trading manually. But not everything is so bad, the most important thing is to gain experience and analyze each of your mistakes and failures, and try not to do that anymore.

Mistake # 1 - not managing risks

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Often, beginners are in such a hurry to open trades that they do not calculate the correct position volume or do not consider it significant at all, because “the trade will definitely be profitable”. Open trades with an approximate volume can turn into big problems if the price suddenly goes against you. You must always remember that any of your actions in the market can result in losses and you need to clearly understand how much you will have to pay for your mistakes.
Undefined trade volume = indefinite loss, which can be equal to 100% of the account or even more. Always consider your risk from position volume!

Mistake # 2 - trading everything

The market is very diverse and sometimes it is difficult to decide which currency pairs to trade, especially when the market is in motion. Imagine that strong growth began in the Euro, an inexperienced trader, noticing such a movement, of course immediately buys EURUSD, then sees a good opportunity to make money on EURGBP, EURCAD, EURJPY and other Euro pairs. As a result, long positions will be opened in several pairs with the euro, and the trader will consider them as separate transactions. But the problem is that all these pairs are correlated with each other and if the euro suddenly changes its trend, then the trend will change on all these pairs. Simply put, it's like one big deal, not several different ones. Often times, by making this mistake, traders take too much risk and lose money.
You can trade correlated instruments, but only if you break the volume of each such transaction into the corresponding number of currency pairs.

Mistake # 3 - sticking to a chart

This is a problem that will haunt you constantly and gradually drive you crazy. Having opened a deal, beginners continue to look at the chart and wait for the price to move in the desired direction. A harmless, not at first glance, occupation will sow a lot of doubts inside you if the price goes against you. You will want to sit out a losing trade or move your stop loss or increase the volume. And if you watch how the price moves in the right direction and the profit on the deal grows, it will seem to you that the price is about to turn around and you need to close urgently. There is a simple solution to this problem - place stop-loss and take-profit at once, then the deal will close itself without your participation and there is no need to follow it.
In addition, constantly observing the chart will blur your view and you will make unnecessary trades, make more mistakes, and as a result, a state known as tilt will arise. Tolt always ends badly, don't stick to the chart and spend as little time in front of it as possible.

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Mistake # 4 - trading different timeframes at once

Make it a rule to trade only on one timeframe. Profitable and stable trading is always systemic trading with clearly defined rules. Different timeframes mean different signals and different markets, different signal filters and risk parameters. By constantly switching between M5, M15, H1, etc., you will see many different signals and it will be more difficult for you to follow your trading strategy, which will lead to error number 3.
You can check with the higher timeframe, but only to confirm the signal on your working timeframe.

Mistake # 5 - trying to recoup

Once you start treating trading like a gambler, you are guaranteed to lose money. If you have a loss now, it does not mean that the next trade is more likely to be profitable, this is how trading does not work. Trade only when there is a strong signal for your strategy and nothing more. Imagine the market as an element that just is. All you can do is take advantage of some of the market inefficiencies to make money. There is no point in getting angry at the market or offended, keep your emotions under control and explore your trading system.

Mistake # 6 - trading without a stop loss

If you do not control your risks, you are losing money, guaranteed. Before opening any trade, you must be clear about what kind of loss you are willing to take and limit it with a stop loss. Stoploss should be placed immediately and should not change for an open trade. This simple rule will allow you to avoid unnecessary losses and stay in the market longer.
When you trade without limiting losses, you simply give your money to the market, this is not why you are trading?

Mistake # 7 - relying on other people's signals

The worst mistake is a mistake that cannot teach you anything. When you trade on other people's signals, in fact, another person is trading your account, but with a large time lag and without strict adherence to risk management, because you yourself open and control trades. It's just ineffective and completely pointless. In addition, when trading on other people's signals, you will not know why you earned or received a loss, because you yourself did not analyze the market and did not generate a signal. It is very important for a trader to learn how to analyze their trades, understand why they got this or that result, improve their skills and trading system. Other people's signals rob you of this and are simply wasting time with them.

You can only become a successful trader by going through all the obstacles and learning how to avoid repeating the same mistakes. This is the only way you can become an experienced trader and steadily take your profits from the market. I wish you success and accompanying trends!

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