7 Terrible Trading Mistakes That Rookie Investors Keep Making

Seven terrible trading mistakes that rookie investors keep making include the absence of stop-loss orders, investing in one or two trades, and buying low all the time. Others are hubris, being too excited, and following the crowd, in addition to dumping shares quickly. These mistakes cost these novice traders significantly.

Knowing them might help you avoid them. Here is a comprehensive overview of these mistakes.

1. The Absence of Stop-Loss Orders

Trading effectively in the markets is impossible if you do not use the tools that are available to you. These tools include stop-loss orders. They will trigger the sale of a particular currency when it reaches a specific price. The idea behind them is to limit your losses as much as possible.

2. Investing in One or Two Trades

The Forex market is a confusing one because things change in an instant. For example, unrest in the Middle East might have an impact on the demand and supply of US dollars. Moreover, the British pound might respond adversely to stalled negotiations with the EU on Brexit. Novices understand that these complex scenarios affect the Forex market. Deciphering them is difficult, so they opt for one or two trades. Unfortunately, they might lose everything if these trades go wrong.

3. Buying Low all the Time

Novices believe that lowly priced trades are an excellent choice because selling them at a higher price in the future is possible. Therefore, buying them low increases their profit margins substantially. However, they fail to realize that market fundamentals are at play. That means low positions might spiral downwards. Therefore, buying low all the time might result in losses because these trades might sink. In contrast, high ones might climb even further than they are.

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