Mistakes to Avoid when Trading
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Mistake(s) when Trading Forex
Introduction: If you can earn $500 a day, you can make $15.5K in a month. That’s more than what 90% of people make. In this article, I will provide you with a step-by-step process on how to make $500 a day from trading. But first, let’s address the common mistake(s) when trading made by beginner traders.
Mistake To Avoid
Over leveraging Many beginners, make the mistake when trading of not using proper risk management rules. Instead of risking 1% on each trade, one thinks that risking only $1 on a $100 trade is too little. In an attempt to double his account quickly, he ends up risking $50 or even $100 on each trade, which is over leveraging. Overleveraging causes anxiety and stress, and it’s a recipe for disaster.
Mistake
Borrowing Money Another common mistake(s) when trading, made by traders, is borrowing money from friends and family to invest in trading. One may borrow $20,000 and expects to make big profits. Unfortunately, he/she ends up losing the entire amount and finds oneself in debt. Avoid this mistake and never trade with money you’re not willing to lose.
Strategy to Make $500 a Day: Moving Average Crossover
Step 1: Practice on a Demo Account Before you start trading with real money, spend the next 30 days trading on a demo account. Treat the demo account as if it were real money, and trade with a plan. Only take trades that align with your strategy, which in this case is the moving average crossover strategy. Additionally, make sure each trade offers a minimum risk-to-reward ratio of 1:2.
Keep a trading journal during this period to track your trades, learn from mistakes, and improve your skills. If you’re not profitable after 30 days, repeat the process until you become consistently profitable.
Step 2: Get a Funded Account Once you have demonstrated profitability on the demo account, consider getting a funded account from a reputable platform like FTMO. They provide a 25k funded account if you pass their challenge and verification stages. Remember, they will take a portion of your profits, but this allows you to trade with their capital and reduce your risk.
Step 3: Implementing the Strategy With a funded account, you’ll be risking 1% on each trade. To make $500 a day, aim for a 2% return on your account. This means you need to maintain a risk-to-reward ratio of at least 1:2 on each trade.
For example, when you see the moving average crossover and an engulfing candlestick pattern, enter a trade. Place your stop-loss and take-profit levels accordingly. Use a position size calculator to determine the appropriate lot size based on your stop-loss distance.
Conclusion: To succeed in trading, avoid common mistakes such as overleveraging and trading with borrowed money. Practice on a demo account, develop a profitable strategy, and aim for consistency before trading with real money. With proper risk management and the moving average crossover strategy, you can work towards making $500 a day trading. Remember to stay disciplined and never risk more than you’re willing to lose.
Choosing the right account type on a trading platform, such as Olymp Trade, is crucial to match your trading goals and experience level. Different account types often come with various features, benefits, and requirements. Here are some general guidelines to help you select the appropriate account type:
Demo Account (Practice Account): If you are new to trading or the platform, consider starting with a demo account. Demo accounts provide virtual funds for practice trading without risking real money. They allow you to familiarize yourself with the platform’s interface, test trading strategies, and gain confidence before trading with real funds.
Standard Account (Basic Account): Standard accounts are typically suitable for beginners or traders who prefer to start with a smaller initial investment. They often have fewer requirements and may not come with advanced features available in higher-tier accounts.
Gold/VIP/Premium Account: Some trading platforms offer tiered account options, such as Gold, VIP, or Premium accounts. These accounts often require a higher minimum deposit, but they come with additional benefits like lower trading fees, access to premium educational resources, personalized customer support, and sometimes even higher leverage.
Islamic Account (Swap-Free Account): Some platforms, including Olymp Trade, may offer Islamic accounts for traders who follow Shariah law. These accounts are swap-free and do not charge or pay overnight fees on positions held for more than one day.
Institutional Account: In some cases, trading platforms offer institutional accounts designed for professional traders, hedge funds, or large-scale investors. These accounts usually have custom-tailored features and benefits and might have higher minimum deposit requirements.
When choosing the right account type:
Consider your level of experience: If you are a beginner, it’s best to start with a basic account or a demo account to learn the ropes and gain confidence.
Assess your trading goals: Determine whether you are trading casually to learn and have fun or if you’re looking to be a more serious, full-time trader. Different account types may align better with different objectives.
Evaluate the account features: Compare the features and benefits of each account type. Check for factors such as leverage, spreads, commissions, customer support, and educational resources.
Be aware of minimum deposit requirements: Some accounts may require a higher minimum deposit, so ensure you can comfortably meet those requirements.
Ultimately, the right account type for you will depend on your individual preferences, risk tolerance, and trading objectives. Before making a decision, take the time to research and understand the terms and conditions associated with each account type offered by Olymp Trade or any other trading platform you are considering.
Selecting the right account type on a trading platform is a critical decision that should align with your individual preferences, risk tolerance, and trading goals. Here’s a recap of the key points to consider before making a decision:
Experience Level: If you are new to trading, consider starting with a demo account or a basic account with lower requirements. Experienced traders may opt for higher-tier accounts with additional benefits.
Trading Goals: Determine your objectives for trading. Are you trading for learning and fun, or are you aiming for more serious, long-term trading? Different account types may cater to different objectives.
Features and Benefits: Compare the features offered by each account type, such as leverage, spreads, commissions, educational resources, and customer support. Choose the one that best suits your needs and preferences.
Risk Tolerance: Assess your risk tolerance level and choose an account type that allows you to trade comfortably within your risk boundaries.
Minimum Deposit: Be aware of the minimum deposit requirements for each account type. Ensure that you can meet the deposit criteria without overextending your finances.
Terms and Conditions: Carefully read and understand the terms and conditions associated with each account type. Pay attention to any hidden fees, restrictions, or limitations.
Regulation and Security: Ensure that the trading platform is reputable and regulated in your jurisdiction. Safety and security should be a top priority when selecting a trading platform.
Customer Support: Consider the quality of customer support provided by the platform. Prompt and helpful customer service can be crucial, especially if you encounter any issues during your trading journey.
Remember, your trading journey is unique, and what works for one trader may not work for another. Take the time to research and compare different account types offered by Olymp Trade or any other platform you are considering. By doing so, you can make an informed decision that best fits your individual needs and helps you achieve your trading objectives while managing risks effectively.
In conclusion, selecting the right account type on a trading platform, such as Olymp Trade, is a vital decision that requires careful consideration. Your individual preferences, risk tolerance, and trading objectives should guide your choice. Here are the key takeaways:
Individual Preferences: Understand your trading style, preferences, and level of experience. Choose an account type that aligns with your trading goals and suits your comfort level.
Risk Tolerance: Assess your risk tolerance and choose an account type that allows you to trade within your risk boundaries. Avoid overextending yourself or taking on more risk than you can handle.
Account Features: Compare the features and benefits offered by each account type. Consider factors such as leverage, spreads, commissions, educational resources, and customer support.
Minimum Deposit: Be aware of the minimum deposit requirements for each account type. Ensure that you can meet the deposit criteria without straining your finances.
Terms and Conditions: Read and understand the terms and conditions associated with each account type. Look out for hidden fees, restrictions, or limitations that may impact your trading experience.
Regulation and Security: Verify the platform’s reputation and regulatory status. Choose a regulated and secure platform to safeguard your funds and personal information.
Customer Support: Consider the quality of customer support provided by the platform. Responsive and helpful customer service can be crucial during your trading journey.
Remember that trading carries inherent risks, and there are no guarantees of profits. Trading with a well-suited account type can enhance your trading experience, but it’s essential to continuously educate yourself, develop a robust trading strategy, and practice risk management. Trading with a demo account before using real money can help build confidence and refine your skills.
Finally, always stay updated on market conditions, economic events, and industry news to make informed trading decisions. Regularly evaluate your trading performance and adapt your strategies as needed. By following these guidelines, you can make better-informed decisions on selecting the right account type and work towards achieving your trading goals.