Dear fellow traders,
Today I would like
to tell you something about my biggest beginners mistake of (forex)trading.
When I was 17, my
dad once came up to me and talked about trading forex online. He had a kind of program
that gave signals to buy or sell the eur/usd pair. I started with just €200,- approximately
but soon it went higher and higher, and reached the point of €1200,- in just
two months.
Besides this success,
I self, did also trade a bit. I was a scalper (some who does very short
trades). And then just one time, it went horribly wrong, and that all because
of one big beginners mistake... no stop loss.
I think much
people make this mistake because when the eur/usd fell very hard, you suggest
it HAS TO go up, it can't go anywhere else because it already felt so hard. But
then you, when you made your trade, it only goes down further and further. And because
of our mind set, we won't close the trading because yeah.. everything's going
to be alright... right?!
No, it doesn't,
and at the point you realize it, it is already too late. So please fellow
trades, set yourself a goal to reach and a stop loss. Move your SL with the
profit you make, so keep your stop loss around 15 pips under the price if you
are in profit. When you are in loss, do not move your stop loss, you have been
wrong and accept it.
After this
accident, I haven't traded for around two years, since the beginning of 2014...
once again my dad came to me, and he had such a nice trading plan.
So for today my
lesson for all of you is, please use a stop loss(SL) and hold to it. Do not
move it, and let your drawdown not be more than 5% of your total equity. If you’re
in profit, move your SL to break even first, then follow it by 15 pips to gain
maximum profit.
Make mistakes, you will learn from it!
Have a nice
weekend you all!
Kind regards,
Vince
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