In this article, we look at common mistakes that new CFD traders make. If you’re a new trader, new to trading CFDs. Some of the things you must ask your broker before you open an account. But if you are starting out trading these are the most common mistakes to CFD traders. Make bye-bye guys if you like this kind of stuff you like your CFD trading you like your market you like all things trading then make sure you are subscribed to the web site because we have regular updates, we’re writing about mindset strategy operational stuff studying great traders a little lot.
The first thing is not having a plan. They don’t have to be crazy about this talk about plans.I’m gonna trade this market during these hours and look for this setup that could be it. In other words, I’m going to trade the footsie 100 shares between the hours of 8 a.m. 10 p.m. 3 p.m. 4 p.m. whatever it may be and I’m going to look for moves that are overextended to short back that could be your rule could be okay. I’m going to swing tray which is most likely what you’re using. You’ll see if these for after an earnings report on a company so I’m going to wait until the company has had earnings and I’m gonna use that as a catalyst to potentially look for of four or five six-day moves or whatever it may be. But the point is having some kind of plan on the risk management in place as well. Number two is over trading big one, these many people fall into the trap. I fall into this trap before when I first started out and he just thinks you because you’ve got this new thing. Here you can go long sure we can buy this. You can buy like inside there’s so much stuff you overwhelm with opportunity and of course, you over trade and over trading will just kill an account. Because you don’t have a strategy to have an edge. All you’re doing is gambling. You get emotional about stuff and just never ever. I know anybody who overtrades and I said that’s a really good thing for them. So don’t do it and threes not using stocks or having some sort of recent management strategy in place by some sort of hedging. Stop-loss takes you out the position if it’s moving against you and I’ve seen many guys saying hey you know what it’s gone. This way I’ll hold it you know, I’ll come back and the trouble is you get away with it many times. But the one time, you don’t end up sitting with a massive loser for a long period of time and that can wipe you well. Make sure you have some kind of exit strategy if things don’t go the way that you planned. Number four is chasing out fear or fear of missing out we call FOMO.
So very often you’re traders world yeah I’m gonna buy this and it starts to go and they kind of get caught up in something else. Especially if you’re kind of not it’s not your full-time career get caught up in other things in life come back. I knew is going up I’m still gonna buy it and you’ve missed the sweet spot, so we have three they move you’re buying it. You have to sit through maybe three days a pullback before it starts to go again. It’s big care if you’re not chasing stuff. I see that quite often a fifth thing is similar to this. Have your stops but having stops too tight. Most people try to mitigate risk by really having stops too tight that I can’t do a risk too much. I put my stopper up because the noise in the market has kind of normal noise or just ping you out of position and then when it’s ready to go it will go so you could have it wide enough. So you don’t get taken out by normal market noise but also you know not too wide that you’re giving it too much room. It’s a finance, something you’ve got a kind of master and the journey all right number. Six is getting too greedy! So many traders will in a good hold of the position. It’s got on a big wave very quickly. I was going first going further. You think it’s the best thing ever now, markets very rarely go up in a straight line, there are some examples out there but they’re the exception to the rule most of the time markets are going to push uptrend. They’re going to backfill a bit maybe with a rotate set a range band environment mean reversion type setups and strategies for a while. Then they might go again you know so if you’re too greedy and you’re looking for more not only you could, please give the profit back and I’m not saying that you shouldn’t hold onto trades for as long as you can but being greedy and kind of look at it objectively and going. How fast it moves not far enough yet it’s got some more that’s fine it starts removed with the grape. I think it’s gonna go to the moon. Start to consider if you’re being greedy and making a decision from a place of greed or whether it’s. Logic and sense about what the markets doing. I think he’s trading too much sighs big one. This goes with over trading guys. Very common because of margin. We think I open trade more suds and trading okay. Let’s put some more money on the table wouldn’t be right and we don’t like killing on this trade when I’m right of course. When you do that that’s the time it ends up wiping you out. Ends up going against you and of course a double-edged sword if you’ve got big size on a losing trade. It’s a big loss, so you’ve gotta weigh up the pros and cons margin is a useful super powerful tool when you use right was super deadly when used wrong.
Eighth thing, I’ve got for you is meddling with a trade. How many times do traders put a trade on do all the homework prepare the trade get the entry to sit there and then they get bored. There’s a tween their thumbs or em or maybe. I’ll just come out of it and come back in again although you got to take a bit off or maybe I’ll always go too far and they meddle with the trade. If you were trading the CFD, you’re looking for a 3-4 week move on the trade then if it hasn’t stopped you out hold the position doesn’t meddle with the RS. Give me look prof after a day because you’re never ever going to allow the traits and mature and give you those good winners and of course if the stories change if something fundamentally or technically has changed on the stock or the CFD your trading whatever the underlying is your trading. Of course, you have to sit with the trade forever but many times we meddle with it we adjust with it. Because we’re bored and sitting on the hands is often the most profitable thing to do. So no guys though are eight things a common see if the trader mistakes. What are your mistakes if you started CFD trading? Stick them in the comments section below maybe it can help some others who see them avoid them.