Everything comes with a price.
And trading on Olymp Trade is no different. In fact, trading in itself is a risky venture. As such, you are bound to make money or make trading mistakes that may wipe your trading account clean.
But none of these trading mistakes should be your own?
What does that mean?
It means, you don’t have to make mistakes for you to learn how to trade profitably.
You can learn from someone else’s mistakes. My mistakes.
Look at my experiences and what lessons I’ve learned over the period of my trading career.
Then audit your trading practices and make necessary changes to avoid making the same mistakes.
Trading mistake #1: too many balls on the air.
Let me explain.
I have seen many traders, both beginners and experienced, overtrading. Here, you find an individual juggling several trades at the same time.
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Well, it may work out for them sometimes. Meaning, most of the time, their accounts are leaking money.
Ideally, opening too many trades should help if your strategy is based on diversification but again, it can curtail you from focusing on what is important when trading on Olymp Trade.
And what might that be?
Well, that would be the price action and movement of the market.
To make money day trading, you have to constantly pay attention to what is happening in the market.
Now, tell me, how can you effectively monitor movements when you have several positions open on different assets?
I’m itching to know.
Trading mistake #2: looking for that elusive magic bullet.
Let me make this clear:
Trading a magic bullet doesn’t exist.
And no matter how much hype the so-called trading gurus tout it, it’s a mistake. I admit I did fall for it a couple of times when I was starting as well. I would spend a better part of my day looking for the best trading strategy on Olymp Trade.
In the end, all I had was a ton of email subscriptions, a library of downloads, and an empty trading account.
So sad, right?
Don’t pity me and still fall for the same.
Stop chasing every shiny thing out there. Why? Because there are plenty. Instead, audit your trading style, find a strategy that fits it, and stick with it.
Here, you need to develop trading systems that revolve around #1 rule of trading, don’t lose money.
You know who Warren Buffett is, right?
His number one trading advice is don’t lose money.
Don’t get me wrong here.
I am not saying trading strategies are wrong. In fact, it is the opposite. All you need is to stick to your guns, learn constantly, and adjust where applicable.
Additionally, keep check of your emotions. Fear and greed are the huge chunks of that.
Fear drives people to make grave mistakes. You know exactly what to do, but here you are waiting for that waiting for the guru to say something.
Get your trading life together and take responsibility by the horns and develop own trading strategy and testing the crap out of it. That’s what the Olymp Trade demo account is for: testing trading strategies.
Trading mistake #3: going against the trend.
I often find this funny.
The market is clearly moving up and as a result, you should be looking for entry opportunities to open a buy position.
Instead, you find some ninja traders opening opposing positions thinking that the market will reverse.
Now, this is a trial and error kind of undertaking. As such, it is your account that is at risk of extinction.
I agree the price moves in a zig-zag kind of way. And if you have a trend line in place, you may think the trend is about to reverse, and hence you jump and open a position betting on the reversal.
When it doesn’t happen, a hole is left on your Olymp Trade trading account.
Repeat that a couple of times and the story will be different.
Trading trend reversal is, in fact, a lucrative opportunity. But you don’t just do it when you think the market is going to reverse. You need to be sure of what you are doing. And that is what confirmation is for: confirming the signals are indeed valid market movements.
Additionally, avoid placing identical trades around the same price points. This happens mostly when you trade out of disappointment, you were sure the market was going to zag, but instead, it zig and you lost money.
Out of anger, you opened another position at exactly the same position just to prove a point. And went underground, again.
Buddy, the market doesn’t care what you feel.
What you see is what you get, and that’s what everyone else is seeing. Swallow your pride and keep calm. Follow the trend, that’s where the money is.
Trading mistake #4: Staking so much on a single trade.
This is money management 101.
Do not invest more than 5% of your current account balance. In fact, it should be no more than 2%.
Why is that?
Because you would wipe your account with just a couple of wrong trades.
If you think about it, putting so much on the line boils down to greed, which is not good for trading.
If you are doing that, you are no different from the trader running around with 40 trades in a single day.
Trading is a long-term game.
As such, it is okay to increase your account gradually. Because the same way you want to rock it with a landslide is the same way your account will be blown.
Trading mistakes #5: not testing the strategies first.
This mistake is related to hunting for the holy grail of trading.
As much as you are advised to adopt trading strategies, have this in mind:
No one strategy is 100% accurate.
As such, make it a habit of first taking the strategies on a test-drive before trading with a real account.
Because I understand that not everyone will find a certain strategy useful. if after testing it on a demo account and you find it best-fit, by all means, open a live account.