A Mixtape on How the Professionals Get It Wrong Sometimes
Things go wrong even for the professionals trading in the financial market. Every day, traders always find ways to correct mistakes being done with their trading patterns and strategies. If you are a trader in the financial markets in Nigeria, you would have a clear view of what I’m talking about. But that doesn’t mean that there are no good traders out there that make money on a daily basis. All that needs to be done is threading with caution always.
In this article, you would be learning about the 7 mistakes experienced forex traders in Nigeria make while trading in the financial market. With this information, a newbie would know how to navigate through the systems in understanding how not to make these mistakes. Trading in Nigeria isn’t common for people to do as a skill. This might be due to people not being educated enough about it in Nigeria – but for those that know and understand the basics and even the experienced, it is important to know these mistakes and avoid them while trading the forex market.
7 Mistakes People Make as Forex Traders
Below are the following mistakes that forex traders make when trading in the financial market in Nigeria. They are;
- Trading without a stop loss
- Risking more than your average trading balance
- Going the revenge mode
- Trying to guess the news
- Using the wrong broker
- Trading based on economic data
- Trading without a plan
Trading without a Stop Loss
This is the first mistake forex traders in Nigeria make when trading. They completely don’t use the stop loss. You might be seeing this for the first time and asking what stop-loss is – stop loss is the order placed with a broker to buy or sell when the price gets to a certain point. As a trader, you must be making good use of your stop–loss if you want to minimize the number of losses you incur during trading.
Risking more than your average trading balance
When trading, it is advisable to not use all your funds in your trading account – so as not to blow your entire trading account. The best you can do is to use 20% of your full account when initiating an entry. This will help you become a better trader, and a more risk manager as you trade and your account tends to grow.
Going the revenge mode
This happens to a lot of traders in Nigeria. They always think they can get revenge back when they lose trades they have executed in a row. Most professional traders in Nigeria are even guilty of this. Never try to get back at your broker or the markets when you lose money. Rather, if you lose money more than 3 times, take a chill and come back to the market when you are more prepared to face the system. With this system, you will be a better trader who knows what he/she is doing.
Trying to guess the news
So many things happen on a daily basis that you cannot phantom. Don’t try to predict what is likely to come out on the news front page. Remember, news reports affect the switch in currency movement. This is the more reason why you have to be careful with how you use the news in making your trading decisions. In Nigeria where news is not taken too seriously, it is best to devise other means of getting your facts right before making a decision that can sweep your entire trading account.
Using the wrong broker
This is the downfall of any forex trader out there in Nigeria. Using the wrong is just the beginning of your problems trading in the financial markets. Before you even start out trading in the financial market, it is best you make your research and find out the best broker other professional traders use in Nigeria before going ahead to create an account with the broker and putting in funds.
Adding to a losing trade
There is a whole lot of misunderstanding when it comes to this. A lot of forex traders tend to add more money to a losing trade when price movement isn’t going their way. When you are trading and it gets to this stage where you are on a losing trade, don’t add to a losing trade. Rather, maximize using your stop–loss to rationalize your losses.
Not having a trading plan
This is supposed to have come first but I decided to make it last – so you can get to feel the importance of this section. There is a wise word that was spoken to a young man, and it says,” He who fails to plan, plans to fail”. This is so simple as it is the key to making profitable trades whenever you go into the forex market. Before you trade, make sure to have a trading plan before jumping into the financial market.
In Nigeria, most experienced traders just go in into the market with half-baked news of where the market is going and the next thing you know is getting your account blown away. Have a plan and work with it. That is one sure way of making a profit and staying in the markets as long as possible.
Anybody can trade in the financial market in Nigeria as long you have an internet connection, a fast laptop with good processing speed to make sure that you don’t lose your trades, you can do it.
The points that are being highlighted for everyone trading in the forex market to tread carefully before making any entry. Learn to practice more and more before spending that money. If you think that you haven’t learned enough, kindly do yourself a favor and watch videos and practice very well before venturing into anything. If you can do that perfectly well and okay, you can always get anything you want from the financial markets and you’ll be good to go.