The number of traders who drop out of the forex Australia market every day is astonishing. However, if you consider that the market sees around 4 trillion American dollars’ worth of trades every day as well, it is not surprising that so many traders fail to make profits and avoid losses in the market.
The turnaround of the forex Australia market is quite quick and large but the real reason for this is not the liquidity or volatility of the market. Instead, it is the fact that traders make too many mistakes.
Thus, by simply avoiding the same mistakes, you can ensure your prosperity in the forex Australia market for as long as you want. If you are wondering what these mistakes are, then consider the following.
Lack of Trading Plan
The most common mistake is trading in the forex Australia market without a solid plan. If you try to trade without a trading plan then your efforts would not be structured well. This would increase the chances of you making mistakes and losing a lot of money.
Belief in Luck
This mistake is most common in new and inexperienced forex traders. New forex traders tend to treat trading in the forex Australia market as a form of gambling by believing in gambling. They keep taking unrealistic risks because they hope that their next bid would get them the rewards.
Overexposure of Account
The gambling nature of new forex traders also causes them to expose their account to the dangers of the market. Half the skill of trading in the forex Australia market is minimising risks which means keeping your account equity protected.
Every time there is a major forex news item released, the market goes into flux and rates start to swing wildly from one end to another. Unfortunately, traders sometimes do not realise the importance of fundamentals and ignore them which results in financial losses.
Another common misconception in the forex Australia market is that the profits are directly proportional to the number of trades placed in the market. The result of this misconception is that traders end up overtrading which means sacrificing quality in favour of quantity.
Not Accepting Losses
Many traders also have difficulty accepting losses in the market. Because of this, they find themselves unable to close a losing position in the forex Australia market before they get worse. Instead, they leave it active in the hope that the trends would reverse in their favour.
Exiting Too Soon
Greed and impatience are two personality traits that can prevent a trader from getting the most profits out of their trades in the forex Australia market.
This would typically happen when a trader has a profitable position open in the market. What happens is that the trader wants the profits realised so much that he closes the position and misses out on further profits which he would have gained because the profitable trend continued.