Stay Away from the Dead (Markets)

There is no instant gratification in the market A common misconception made by new traders is that there will always be constant price action which means constant profits.

Unfortunately, this is far from the truth. The market does not always move and there are periods where the charting software on your computer looks like it has locked up because price isn’t moving at all.

Trying to stay awake watching 5 pips movements is tough enough much less trying to make money. Inexperienced traders should stay out of such dead markets. But what do they do instead? They think, “I can’t make 20 pips using one lot in this market, but I can try to make 2 pips using ten lots!”

Because they feel they ‘have to trade” and “make money today”, they unsafely increase their position size and attempt to grab some pips in a market showing very little price action. These traders are not only forcing trades, but they are forcing trades with increased risks with the use of additional lots. A double no no.

This is when traders become a danger to themselves and their accounts. If there is an unexpected move against their trade, they will get killed due to the size of their open position.

Always remember that a bigger position size not only magnifies potential profits, but also magnifies losses by the same amount.

  • spidypips

    forcing trades + increasing risk = danger for ourself and our accounts

    I take that advice ^__^