Too Many Trades at Once and Over-Trading
What is over Trading?
Over trading is making more investment in buy and sell more than capital amount. The consequences are the trader may loss all their money. This is either done by the broker or by the individual .Trading is the process you build slowly and steadily, it’s not like you throw some amount and earn back more money.
At the early stages make small investments in one or two markets learn and understand the process gain experience build your own strategy to avoid Mistakes. Spending more time in understanding will make it easier and better for you to become successful trader. When a trader makes more trading, it can lead to an extreme loss.
Broker over trading for the client account it is strictly prohibited, they usually over trader in the thought of gaining more commission fees, this kind of activity is called churning. The investors can find out if the broker has been overtrading in their account by comparing their profit with the amount they invested.
An individual trader will also over trader some times, but this act is also not approved and there are lots of risk they could loss all their money because of doing Mistakes. Few over traders use their leverages, leverages are actually from the borrowed capital money that is used for making more investments, and this also called loan capital.
The borrowed capital can be taken in the form of a loan, agreement and credit cards. The interest amount for the borrowed money is based on the amount of the borrowed money. Sometimes a trader makes over trading on confirmation bias, this refers to the psychology of an over trader. They ignore true facts and dates, they always seek for any information that they believe in.
— Spend long time in Trading with Chart
Long term Trading
Long term trading is a strategy followed by the investor as individual or company; they hold the investment for over long period of time it can be one year or more than one year. Simply when a trader buys a stock they wait for the maximum raise in the price to sell the stock.
Long term in company refers as the company holds to the trade or stock or assets they bought for over a long period of time. Long term in individual is saving for future as there are expenses that need more time to acquire the amount.
Consequence of long term trading
The main consequence of long term trading you has to invest some amount your capital amount which cannot be used until the trader is over; the client may feel sometimes there is hold of their money in a single trader which can be used otherwise.
Client must completely know about the trade their investing for long term. The client needs more patients while investing long terms, if they are not patient there are chances you might lose their money.
Avoid long Term Trading
A successful trader knows when to stop. In the chase of more money a trader is usually tempted to make more trades; this only increases the rate of risk and can cause much loss to the trader.
When there is higher rate risk in losing the trader have to sop and find a way to make it profitable.
The maximum expectation of the traders is to get profit when they end trade which is not always possible, but by making stop loss we ensure we won’t be having a tremendous loss.
Track the timing of trading analyse when there is rise and fall in the platform. There are certain timings in trading
— Make Trading Decisions from Short Time-Frame Charts
Short Term Trading
Short term trading is a strategy followed by investors either individual or company, short term trading is done either within a few days or several days.
A short term trading involves many tools and different methods, the investor need a fixed strategy to succeed using this strategy.
Consequences of Short Term Trading
Short term trading is considered the risky strategy investing in this can lead to drastic changes in your investment, which will lead to loss of entire amount in small amount of time. Also it can be more stressful for the investor as they cannot predict the market.
The investor has to put lots of hard work; they have to invest more time in the market looking at the charts. Sometimes the return rate of the investment is lesser than expected, even the income of business can be affected.
Avoid Short Term Trading
Successful trader will analyse the pattern of the market and understand the trends in the market, as by learning the pattern you can know the good times to invest in short term trade.
Analyse the market when it is positive and negative days in the market and invest accordingly. Learn to manage risk
— Try it with demo account before investing
What is demo account?
A demo account is designed by the trading platform any traders that want to practice in trading platform rather than investing in real trading account.
Demo account allows people who have no money but always wanted to trade, don’t know what to do and where to start but have money for investment and trained traders those who want to try out their new strategy.
Beginner traders can make a demo account first rather than creating live trading account, make small investments in the demo account it will allow the trader to gain experience in real time trading and lower the risks factors.
— follow the international News Distractions in regular update
There are many daily news updates available, where you can gather information’s about day today changes happening in the market which helps the traders to make investments according to the present market values.
If you are a beginner trader then you can follow the international news regarding trading that is been updated on daily basis, they can learn the daily changes and development in the market.
This helps them to invest in the right currency; makes easier for trader to predict profit and loss in the market.
Following daily updates about trading makes the trader more focused on the current market, making it easier for the trader as they know in which stock to invest in to gain profit and avoid stocks which can be a loss.
The daily news usually updates the ups and downs in the market, when a trader constantly follows these news feeds they sometimes tend to understand the strategies on rise and downfall on the market, which helps them to gain more profit in the market.
Being in a regular update with news on trading you can learn more about the strategies ,get some help on trading, gain more ideas about the market.
— calculate the random possibility of trading strategy
What is Trading Strategy?
A strategy is nothing but a plan that helps you to achieve in anything. A trading strategy is a plan that helps the client to achieve more profit. They strategy someone uses has to be fundamental and technical r even both. There are different types of trading strategy they are scaling, day trading, swing trading, position trading Strategy is the important in trading.
The trader must experiment their own strategy in the market and find the proper strategy that works for them, it is not advisable to follow others strategy as each trader has different trading experience.
1.Types of trading 2. Scalping
Scalping is a short term trading which happens within seconds and minutes. There will be large volume of trading with smaller profits throughout the day. The trader mostly invests in major pairs.
Day trading is also short term trading that ends within one day as the trader enters and exits the market within one day. The result of the trade can either be profit or loss, the client usually holds the stock for few minutes or hours. Day traders must concentrate in fundamental and technical analysis of the market that helps them to gain more profit.
A swing trading is usually short or medium term trade as it can takes several days or months. The traders hold the stock for days and month which there is no need for the trader to sit and watch the market constantly. This trading style is most common with people who want to trade as part time.
The position trading is a long time trade and a client holds the trade stock for weeks and years as they expect more marginal profit. A long time trader uses technical analysis and fundamental strategy in trading. They usually don’t concentrate on small losses. They analyse and evaluate the market on weekly and monthly charts.
— Avoid Sense of Desperation or Urgency to Trade
In trading when trader’s losses in market continually they usually tend to get more desperate in gaining the lost money. Sometime the trader focus on earning more money this makes them desperate, often this makes many traders to fail.
In earning more money or gaining the money back that is lost makes a trader desperate, then they looses the fundamental logics and strategies they are using and sometimes make more trading which is overtrading or make bad investments buying or selling stocks that can lead more loss to them.
Sometimes rather than waiting and analyse the market chart they tend to get bored sitting in front of the market they get urgency to trade in the moment which can lead to loss of money.
How to Avoid Desperate Trading
You must develop your own strategy on the basis of fundamentals and techniques which you must stick to it at any cost. Make your own rules set goals within the rules to understand your trading method. Have a more positive mindset and realistic goals.
Admit to the loss, don’t get greedy or lose hope always believe in your instinct. Take time from loss and bounce back stronger rather than stressing yourself about loss.