Even the most experienced gold traders will still make mistakes when trading. Sometimes the best overall strategy is one that limits the amount of mistakes you could make. Trading can be extremely rewarding when done correctly, but too many mistakes can quickly render your experience into a devastating one. Here are five of the most common mistakes traders make.
1. Risking Too Much
Many newbies to the online gold trading world will try to get ahead from the start by risking too much capital. By thinking in terms of percentages instead of dollar amounts, traders can better manage the amount they risk at any given time. For example, when you are only willing to risk a maximum of 2% of your capital, you can better manage your money. Of course, you have to stick with the maximum percentage you set to avoid making the mistake again.
2. Not Enough Research
When you trade gold online, you have to not only know what’s going on in the world today, but what also may be happening in the future. Anything from political elections to currency fluctuations and anything in between could impact your trade. Don’t just guess when it comes to making trades online. There is always something happening in the world to impact your decision, so you just have to find it.
3. Trading Without a Plan
Starting from scratch or not having a plan is one of the biggest mistakes gold traders can make. When you plan to start gold trading online, set up a plan by practicing. You can set up accounts to practice with using virtual money to get a feel for how you want to develop your trading plan. The simulation won’t be exactly like real life, but at least you’ll have some knowledge before you start using your hard earned money.
4. Not Having a Net
As much as gold traders want to watch the forex markets every minute of every day, it’s simply not possible. That’s why the experienced gold traders set a net to make trades and even get in and out of the market when they aren’t available to take action. Having a net will reduce your emotions a little more, which is always good when trading gold.
5. Overreacting and Trying to Catch Up
New gold traders tend to overreact when they lose money. The worst thing people can do is try to catch up and react to the loss. Instead, just understand losses will happen when trading gold online. Your trading plan should take the possibility of losses into account, so it’s also a good time to evaluate your plan when taking a loss.
Understanding you will make mistakes when trading gold online is the first step to becoming a successful gold trader. Register a free account on our website for easy access to more helpful tips like these!
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