There are various factors that determine the success of trading on the stock market. But, due to inexperience, some players make mistakes that lead to losses. For more details, this article, written with the participation of experts from the broker Imperial Wealth International, will tell you.
What does a trader do?
It is engaged in the purchase/sale of various financial assets. The main purpose is to make speculative profits on price differences. Traders who conduct transactions on behalf of third parties are institutional. They use a large set of methods and tools in their work.
To enter the stock market, an agreement is signed with an intermediary beforehand. Forex Imperial Wealth International is a good broker with clear, fixed commissions. Has several types of accounts, does not cheat customers. Payouts come to all. Licensed. There is control by the regulator.
A good player must be able to manage risk. Psychological control is also important, because emotional reactions to certain events can lead to bad decisions.
The broker Imperial Wealth International does not limit the choice of strategies and regularly updates the data on the website so that all clients are aware of the latest news and market trends. A good trader should regularly update their knowledge. There are plenty of training materials for this purpose, which are provided free of charge.
Forex Imperial Wealth International tells about the types of players in the market
Traders differ not only in behavior, but also in the psychology of trading. That's why they come in:
- intuitive. All decisions are made without predictions, strategy, or other tools. The player trusts his gut, which is not always positively reflected in the account;
- intellectual. The situation is the opposite. The trader studies everything, takes into account the data of fundamental and technical analysis, builds his strategy;
- instinctive. It is somewhat similar to the first type. Here, too, everything depends on emotions, so decisions can be spontaneous, but charts are still taken into account.
If we talk about behavior, the experts of Forex Imperial Wealth International highlight:
- bears. They sell assets in order to buy them later, but at a lower cost. The difference is the profit. Such behavior is clearly expressed in a downtrend;
- bulls. Their income depends on the rise of the exchange rate, the rise of which they provoke. They buy assets whose price is supposed to rise, and then resell them on a speculative basis, making good profits;
- sheep. They have no strategy, but they act spontaneously, so they make most of their deals on emotion;
- pigs. These traders work fast, dirty, without hesitation. They can trade against the rules;
- chickens. Cautious, indecisive. Because of this, miss profitable deals, losing profits;
- whales. They are characterized by consistency, calmness, and trading for them as an element of business. Respect risks. Make decisions in a balanced way, without haste.
Forex trading can be done in different ways. Everyone chooses their own behavior, suitable strategies and tools.
Broker Imperial Wealth International on the mistakes of beginners
Inexperience, lack of knowledge leads to unnecessary losses. These are the mistakes most often made by novice traders:
- work without a plan, without a definite strategy;
- Manage the risks incorrectly. Some players do not use stop-losses, or set the wrong parameters. This leads to significant losses, especially when emotions are not under control;
- do not use fundamental analysis. Beginners usually focus on the technical, ignoring the relevance of news, some events, although they can affect the value of the currency;
- regular switching of strategies. Without testing the effectiveness of one, they switch to another, which leads to not very good results;
- No proper level of training. Some players start working in Forex without taking special training provided by brokers. Also, they don't practice their skills on a practice account, relying on luck and intuition;
- Lack of discipline. Beginner traders often ignore the rules of trading, do not follow their strategy, which also leads to additional losses;
- forget about liquidity. Many inexperienced players start working with currencies with low liquidity, which can lead to certain difficulties when closing a position;
- An improperly chosen broker. Beginner traders can open an account with an unscrupulous company that provides low-quality services. Such intermediaries may have overdue documents and problems with payments. Broker Imperial Wealth International is not a scammer. Licensed service with clear conditions. Several types of accounts, verified payment systems, fixed commissions. No one cheats clients here, there are no restrictions on withdrawal, free training is provided.
Beginners often use high leverage which also leads to losses. Also, they can forget about the psychology of trading, giving in to emotions, making wrong decisions.
How can a novice trader improve his skills? Recommendations of Imperial Wealth International broker
To achieve a certain degree of success in Forex, it is worth:
- to study on a regular basis. There are quite a few courses, useful seminars, webinars, books, articles. Plus, there are communities of traders where you can communicate and get advice from experienced, successful colleagues;
- Work on your mistakes. Broker Imperial Wealth International recommends that you keep a trading log to record the trades and the reasons that led to one or another outcome. This will help to avoid mistakes in the future;
- Develop your strategy;
- Practice skills on demo accounts. This way one can gain new knowledge and trading experience without risking personal funds. Plus, this kind of training makes it clear which strategy is effective and which is not.
The experts of Imperial Wealth International broker recommend to follow the news, economic events, which can have an impact on the exchange rate. This is significant information, which is worth using when trading Forex.