When it comes to everyday trading, many are baffled by the thought of how frequently should you be plunging into the markets? The enticement is always unrelenting especially when traders are faced with highly volatile markets to pitch in with every move that comes along. The common drawback is usually the notion that more trades with ultimately mean more opportunities for gaining profit and many find this trend almost impossible to resist. This is perhaps the simplest way to lose investment money in the shortest period of time.
Prior to actual trading, you should contemplate on the reason on why you are doing it in the first place. Do the technicalities direct you to change your position in the shift of price action? Will the essentials imply that there will be a predicative move in your favoured position? Or is it just a case of being easily carried away by a large move in the market and you simply want to grab the opportunity in gaining profit in the shortest time possible? If you are clearly betting your chance on the latter aspect then you are definitely heading for a severe headache of losses.
Planning your move.
When it comes to spread betting and contract for difference (CFD) trading or any other form of conventional trading, investors can be on the right track but still lose a whole lot of their investments. This is precisely what is ahead for traders when trading at high frequency. If ever you find yourself into the right trade but fell short of time, it is wise to go into a trade that views a sharp turnaround or opt to trade a small percentage of your capital on a credible trade that has an impressive result rather than in a reckless decision then you are on the wrong end of the trading continuum. Finding yourself in any of these ensnaring traps in trade and you can be correct about the direction of the trade but still have streaks of red at the end of your trading day.
The risk and reward
When you’re trading, you should always be cautious and vigilant in examining your risk/reward ratio. Only enter into a trade when you have the highest possibility for a substantial gain than you could possibly lose on the trade.
By entering trades in a less often cycle; it is much simpler to keep up with realistic risk/reward ratios at the same time avoiding being bullied by one large market that you are unprepared to hedge. If ever you find yourself losing money by trading several times in a day, then you simply keep things in perspective by being practical about your trading habits. The best way to have consistent returns is basically carefully picking your trades carefully by examining your objectives upon entering and your options when you will exit and how much will you be able to tolerate in losing as with gaining. By being consistent with your trading habits with a slow but steady pace it will surely bring back good returns on your investments.