Don't make mistakes in trading, be a good trader, Mistakes in Trading .com 

Mistakes in Trading .Com

We are glad to welcome you on our site! We a community of independent individual traders from many countries. We have tried to collect the most useful materials, concerning trading securities for beginners and professionals. If you have any question about Trading, Stocks, Forex etc. you can ask us and we'll help you absolutely free. Also we are planning to make member's blogs about all this in the near future. First the bad news: best estimates suggest that 90% of individuals who trade commodity futures lose money doing so. Now for the worse news: This estimate may be too low. The sad fact is that somewhere along the way the majority of traders make one or more critical mistakes in their trading, which cause their losses to exceed their winnings. The good news is that the mistakes that cause most losing traders to fail are quite common and readily identified. These mistakes are discussed on this web site. The better news is that by being aware of the potential for making these mistakes and by taking steps to avoid them, you can make a great leap towards becoming a more consistently profitable trader. The information contained on our site will help you to become a more successful trader - not necessarily by teaching you to be a "good" trader, but by teaching you how not to be a "bad" trader.

Why So Many Fail?

To generalize using the broadest stroke possible, the high rate of failure among futures traders can be attributed primarily to three factors:

  • The lure of easy money
  • The lure of excitement
  • An utter lack of preparedness to deal with the potential downside

Unfortunately, it seems that many individuals are lured into futures trading for a lot of the wrong reasons. To draw an appropriate analogy regarding futures markets and futures traders, consider the following scenario. Suppose someone offered anyone who shows up the opportunity to drive an Indy race car around the track with the promise that the person with the fastest time will receive a $10,000,000 prize. Will a lot of people show up to take a shot? You bet. Will most of them be truly prepared for what they are about to do? Not likely. Will someone win the $10,000,000? Of course. Will 90% of the drivers fail to make it to the finish line? Welcome to the exciting world of commodities speculation!

What Sets Futures Trading Apart?

The staggering rate of failure among futures traders raises several extremely relevant questions:

  1. What is it about futures trading that causes such a high percentage of participants to fail?
  2. Is there a way to avoid the pitfalls that claim so many traders?
  3. If the failure rate is so high, why does anybody bother trading futures in the first place?

What is it about futures trading that causes so many people to fail? People who have been successful in every other endeavor in life start trading futures and quickly watch the equity in their trading accounts vanish. Why is this? The answer is really very simple. It is because futures trading is unlike any other endeavor in life. If this sounds like an overstatement, rest assured it is not.

There are several factors that set futures trading apart from other forms of investment. To begin with, unlike the stock market, where rising prices can make any number of people richer, futures trading is a "zero sum" game. This means that for every dollar you make trading, somebody else is losing .a dollar. If it is true that 90% of traders lose money, then we must conclude that a small minority of traders are making all the money at the expense of the vast majority. Secondly, the futures markets involve a great deal more leverage than most other types of investments. To put it into comparative terms, if the stock market were a race car, then the futures markets would be a rocket ship. While a car going 200 miles hour is certainly "fast," its speed pales in comparison to that of a rocket ship traveling 3,000 miles an hour. Finally, futures trading offers speculators the opportunity to generate spectacularly exciting rates of return, far beyond those available from other forms of investment. Maybe that is part of the problem.

What's this site about?

The main mistakes in trading are:

  1. Lack of a Trading Plan
  2. Using Too Much Leverage
  3. Failure to Control Risk
  4. Lack of Discipline

But why do traders make trading mistakes and how to avoid trading mistake? For each of the four biggest mistakes in futures trading we will first discuss what the mistake is. We will then examine and try to explain why it is so common for traders to make this mistake and why doing so causes traders to lose money. Finally, the last portion of each section will try to offer some guidance as to how an alert trader can catch himself before he makes these mistakes and how to avoid them altogether in the future.

Categories in Trading Mistakes

Lack of Trading Plan
Planning plays a key role in the success or failure of any endeavor

Using too much Leverage
Determining the proper capital requirements for trading is a difficult task

Failure to control Risk
Refusing to employ effective risk control measures can ensure your long-term failure

Lack of Discipline
A lack of discipline can destroy even the most talented and best prepared trader

Useful Advices to Beginning Trader
You can control your success or failure

All about Stocks
Encyclopedia about Stocks. That you should know about Stocks before starting

Forex Glossary
All terms about Forex market, 2008-2015 - don't make mistakes in trading, be a good trader!
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