Avoidable Mistakes that CFD Traders Make

Making mistakes is a part of human nature and no matter how conscious you are all the time you will make mistakes eventually. CFD market is the most lucrative market in the world and where you can participate if you have a computer, internet connection, and any amount of money for investment. But earning from the market is not as simple as joining this market rather than it is much complex to make a decision which will give you a potential profit. Forex market traders make lots of mistakes and in this article, we are going to talk about a few mistakes that can easily be avoided. 

Avoid trading when you are losing

Losing is a part of CFD trading and you have to take it positively no matter what the situation. If you studied CFD market, you know that losing is a part of trading business. You should always try to keep your winning rate higher than your losing trade but there can be a time when you are in a losing streak. In this type of situation if you try to regain your losing capital you will end up making an odd decision which might result in more losses. So, try to take a break from trading if you are facing continuous loss. 

Trading without stop loss

Forex trading is a risky profession where a trader always needs to try to reduce the risk exposure. For reducing risk exposure there is no other option than to use a valid stop loss. A stop-loss order helps a trader to reduce their loss if the market keeps going against them. You can never make a 100% correct prediction in the Forex market and it can change its direction within seconds. So if you trade without any stop loss you are giving the market 100% opportunity to take away all your trading balance at any time. So never try to trade without stop loss because it helps you to keep your trading balance safe. If you lose your trading balance for once then gathering new investment will be much harder than you can imagine. No experts in the Mena region suggest to trade without any stop. Try using the Saxo demo account and soon you will stop taking trades without having a precise exit point.

Improper lot size 

This a common problem for Forex traders because they often try to open a trade with bigger lots than their accounts can handle. The bigger your lot size, the more you can earn. But you need to use a lot size in which your trade can have proper breathing room. Your analysis can be 100% right but it is quite rare that the market goes in your favor from the time you opened it. It needs some breathing room before it shows the result. If your account balance could not give the trade enough time to breathe because of the lot size, you might not see the positive result. Rather, you might blow your account. 

Try to understand the news

Different traders analyze the Forex market differently. Some like fundamental analysis and some like technical analysis and some combine both analyses before making any trading decision. But when any news is published, the CFD market do not follow any technical rules and it makes moves that you cannot predict if you don't understand or learn about the news. Most of the traders like to trade with technical analysis but this is one of the biggest mistakes you can make. If you cannot do fundamental analysis, in the time of news you will nothing but just make a loss. So either you need to avoid trading during any news and announcement or should learn fundamental analysis so that you can anticipate the news. 

Trading without a plan

Trading without a plan is just like gambling in a casino. It is one of the biggest mistakes traders make. Often traders just find an entry and go for it rather than analyzing the risk-reward ratio or knowing what he will do if the market goes against him. Avoid this type of behavior if you want to have a positive result from this market. A trader first needs to plan his trades, you must execute trades according to the plan.

These are the common mistakes that a makes while trading in the CFD market and you can easily avoid them. If you are still not making enough money, we hope our article will help you to identify flaws and mistakes in your trading plan.