We tend to hold the position and wait as before, but unfortunately this time the price never returned. We who are lulled by sideways market will have choice between margin call or top-up account and hold holding until swap spend balance from us.
From that experience, we must realize that the fact that losses often occur-in fact, make us bankrupt-is only caused by two factors.
Factor1: Holding a Position Contrary to Market
We must have heard a phrase “trend is a friend” or “follow the trend”. The phrases created by professional traders illustrate how they profit, “just follow the market trend, then you will profit.” However, why many traders who loss just when the market trending?
One of the causes is that while we’re in the “comfort zone” of the sideways market-generating profit every move up and down-but turning floating loss because it still hold position when the market turns into trending. Holding a position against the market is a mistake. Profits that have been produced for 1 year, just disappeared in 1 night. Worse yet, if we have to top-up account just for not ready cut loss.
The error begins when we have to change and even remove the stop loss that we specify, because it is usual profit and feel “I can beat the market using cfd trading“. Over confidence arises that leads to a margin call.
To overcome this, we must be able to determine market restrictions. We should be able to know where the limit when the market is no longer sideways and where the limit of confirmation when the market turned into trending.
Factor 2: Using Lot Too Big
Although when the sideways market is our moment that most often generate profit, we should not over confidence. Moment market sideways can also cause Margin Call when we use a lot too big and not balanced with the capital we have.
Forex business is not a business about how much profit we can get, but how long we can survive and generate profits consistently. To survive, the key is money management.… Read More