06/09/2017 Dmitry Boytsov
In the Forex market, there are sometimes situations where currency pairs make a giant leap in minutes or seconds.
The presence of a stop loss order can not always reliably protect the trader’s capital from such an event, since the movement has an extremely high speed, a liquidity shortage and a large slippage due to the extended bid-ask spread are created.
How not to get into such a situation and avoid big losses in day trading, watch a video in 2 minutes.
11 rules of trading Boytsov + rare but useful lessons
Error number 1. A novice trader does not want to learn.
Very sorry, but it is. Not many people like to read, okay to read some interesting book, but sometimes you have to read and learn things that are difficult to understand (do not forget to read books from the Trader's Library section). Even the banal, transaction log, due to human laziness, not everyone undertakes to start it, and if it is started, then you need to find efforts to overcome laziness.
But think about it, we must indicate in it our main mistakes and learn from them, but we do not want to do this. Hence the problems arise. Read something, somewhere, it seemed enough and so smart. You think 95% is drained, then I’m not 95%, I’m 5% and I will earn money, besides tomorrow. From here comes the second critical error of the trader "greed", you need everything at once.
Mistake # 2. Greed is the enemy of the trader.
"What kind of textbooks are there, they are for fools, and so everything is clear, draw a trend and work from it. Business then".
Novice traders, what are they doing? They open a terminal, in the best case study what is before their eyes, these are various tools for drawing on a chart, the currencies presented, play with indicators, connect a demo account, buy, sell, that's all.
Seeing quotes before your eyes, multiplying the number of points passed by lots in your head, eventually getting large amounts, of course you don’t want to waste time, but you want to immediately get into the deal and earn some more money. It is at this moment that the third problem appears: "trading at random."
Mistake # 3. Fuss and desire to recoup right away.
A beginner, seeing that the market went where he originally planned, of course begins to think that the stop was not set correctly, and therefore, an urgent need to enter into a deal.
The market does not forgive such actions. The father scolded his son not for playing cards, but for acting out. Could not catch the trend, wait and think what is wrong.
Guys, do not fuss. Wrong, think again, maybe the analysis was wrong, no need to jump into the outgoing train, nothing good will come of it.
But if, nevertheless, a decision is made and you open a deal, or what happens more often, you were waiting for a signal, but it still isn’t and isn’t, but the position “seems” is not bad for entry, in this case you can put an end to the deal, in 90% of cases , it will close in the foot.
You know the pattern, sit and wait for the market to draw it, then the entry will be competent and justified.
The rules are easy, having written them down once, you need to develop a character and try to work correctly. As soon as the main trading errors disappear from your journal, you can safely assume that you have taken a step forward.
In the next step, new difficulties await.
Mistake number 4. Emotionality is the main mistake of the trader.
Emotions harm trade. When you need to open a deal, emotions can interfere and make you think that the price of 100% will go in the opposite direction to us.
In this case, only the algorithm will help. Everything should be spelled out, all the patterns sketched and if you see what is drawn on your piece of paper, turn off your head and enter. This is the only way to understand whether a strategy works or not.
Often, the emotional state is disturbed. Either there are problems at home, or your condition is bad, or maybe you have made several transactions, and all in the red. The trader feels excited: "How so, everything falls out of hand, well, finally, my position." And again minus.
Only one way out, do you feel at ease? Close the terminal and to fresh air. The market was yesterday, today, and we can say with confidence that it will be tomorrow. Money today will not work, but to drain the entire depot, this is please. So, rest, rest and rest again.
Error No. 5. No need to listen to anyone!
Another major mistake of a novice trader is that he searches for a guru in various forums and trades using his advice.
You can’t do this, you should have your own plan in your head, your own idea of what you want to do. You don’t know what the guru’s feet are, at what moment he closed his deal, and at what time he opened. Maybe he opened a deal, and informed about it after 20 pp and set the deal to breakeven, you listened to the guru, you will enter the same direction, and the market will turn around. The guru will remain with his own, and you will catch the stop.
This is one example, you can bring a bunch, but the fact remains, you need to listen only to yourself, you can’t learn to trade otherwise. You can listen, but be sure to analyze the information and delve into yourself whether this approach is suitable for you or not.
Error number 1. Probably trading is the way to drain.
In the best case, the beginner will learn some sort of strategy. It’s just some kind of thing, since he doesn’t understand anything in the market, who sells, who buys, what’s going on, why yesterday there was 100 pp movement, and today 20 didn’t go through, but there is a strategy posted on the Internet and let everyone around say: "Work strategies vryatli distribute for free"but he’s a genius, he found exactly what will bring the money.
In the worst case scenario, a novice trader will rely on his inner “hunch” (which is not and cannot be without experience).
The newcomer will want to immediately enter the market, because he thinks the best price here is for opening a deal, and even more so, the stop is worth it, why be afraid. But, alas, a mistake, the first loss, the deal closes exactly in the stop and from this place unfolds in the right direction.
What happens in a beginner’s head? He begins to ponder the 4th the main mistake of traders.
Mistake # 2. Beginners do not comply with money management.
When does a trader begin to break money management?
Option 1. The trader seeks to cover the stop for the previous losing trade, and this is nothing more than an attempt to recoup, which means you took a step back and go to step 4.
Option 2. A trader simply does not know about his existence. In this case, you will have to study the opinions of different experts and use the most liked system for calculating lottery. Usually it is 3-5% of the deposit.
Option 3. Starting to make profitable transactions, the trader begins to think about lottery, and not increase it (read the article on Leverage)? This cannot be done. By increasing the lottery, the chance to merge the deposit will increase.
Mistake # 3. Trading against the trend.
I want to note that this item is considered a mistake for beginning traders, since there is little experience and there is no confidence in their actions. Of course, many experienced traders are opponents of trading against the trend, but at least it does not bother me to keep a position on the trend and enter a small pullback. The main thing is to know where and where.
I do not advise beginners to trade against the trend, a mistake can be expensive.
Mistake number 4. Trading without stops.
The most stupid thing to do is trade without StopLoss. Both experienced traders and beginners make mistakes - this is normal. We cannot control the market, the only thing we can do is to prevent the market from picking up beyond measure.
Before entering a deal, you should not think about profit, but about loss. Accept the stop ?, open a deal, no!, So we wait further. And if you got a stop, then there is no trouble, you are not very upset when buying a ticket for a bus or metro. These are expenses that will help you earn more. One should also think about feet.
Error No. 5. Catching knives.
Do not run after the market. The most frequent divorces of large players, just that on sudden movements. Usually this happens on serious news (nonpharma, etc.), when the price jumps in one direction, everyone follows after with thoughts: "I’ll catch it nowtraffic!", the market takes and turns, and your position is open at the peak, but not in the wrong direction.
Hence the rule, do not trade sudden movements, especially news. Gain experience and patience, wait for your entry. As one cartoon said: "Calm and pacification".
Mistake number 6. Averaging.
The biggest mistake a trader, after a knife is caught, is averaged.
Forget this concept and never even think about it. You can add to the deal only if it is already in the black, otherwise, you will be in danger. Once it works, the second time it comes out not bad, but for the third, merge the deposit.
Error No. 7. Beginners do not keep a diary of a trader.
And in conclusion, the main mistake of any trader (beginner or experienced) is the lack of a diary of a trader.
Beginner is completely in the trade. He’s trying to constantly act, somewhere losing, somewhere earning, but ask him: "Based on what did he log in a week ago?"and he will not answer you. Since school, every person was taught:"Do your homework"whoever understands this is easier for him, and whoever doesn’t understand, will constantly stagnate.
To analyze completed transactions, this is not an important part of the work and it needs to be done carefully. To do this, the trader needs a diary (journal) of the trader in which ALL is written about the open transaction.
Well, guys, I wrote probably all the main psychological and technical errors of the trader. If I remember anything, I will add it, but I assure you, learn not to complete these 12 points and you will be happy. I suggest that you post your main mistakes in the comments. Let's study together.
Practice and don't stop analyzing the market. Make your brain work and look for working patterns. It is vital for a trader, firstly, to be in good shape, and secondly, to constantly develop. Good luck to all of us in the trade.