The electronic mini market is full of frustrating stories about what traders should do or may do. Failure is a key component of a free market system. Without a loser, you can't have a winner. For businesses that want to learn from the horror stories of trading account corruption, the mistakes to avoid are very clear. 99% of retail traders fail because they ignore three very basic principles.
A successful trader has the ability to identify his or her strengths in other market participants and is able to take advantage of this to achieve sustained profit. After understanding your strengths and weaknesses, as a trader, you can encounter certain problems in the transaction before you start to influence your profit. Let's take a look at some of the common mistakes retailers have in the market so that we can analyze our trades and see if there are any things that need to change.
Lack of funds
Trading is an expensive job. While there is no perfect or fixed amount of capital needed to ensure market success, it is often assumed that any funding below 5,000 is impractical. Commissions have fallen sharply since the advent of electronic exchanges, but retail traders still face serious back-end costs. Day traders are the most affected because they typically make three to four trades a day to make a profit. Even if the responsibilities are low, the trading frequency will soon affect the bottom line of the trader. If your trading capital is low, you can start with futures or forex trading, as you usually need less money to open an account. ***WARNING*** Be very careful when trading futures and foreign exchange, as your losses may exceed your initial investment. Trade within your limits. ***
2. There is no clear trading strategy
If we don't know what it will sell first, we will see individuals opening an electronic mini-transaction account without knowing the trading strategy they will use. Traders make money in this business by adopting very specific strategies. A good trader will rely on one or two settings to earn consistent funding. Before you start trading, you need to know what your plan is. This will save you from trading and random trading.
3. Not educated about price behavior and market behavior
Most failed traders do this because they don't understand how the market works or how to find good settings. You can save a lot of time and effort by looking for experienced traders who will educate you about market behavior. Don't be limited to one person. Go out and find the trading coach or system that best suits your personality. Take a moment to understand the pros and cons of each trader's style and then incorporate the benefits into your strategy.
Electronic mini-transactions are not an easy task, but if you are ready for your own success, you can avoid the disappointments and frustrations experienced by many new futures market traders.
Orignal From: Why most electronic mini futures traders have failed
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