Why is trading difficult? Or how to avoid common beginner mistakes

No matter what anyone says, trading is a difficult thing. There is no magic pill that turns a newbie into a trading guru in the blink of an eye. And there is no single best strategy that works for everyone. In order to become a trader, people spend months and years and devote a lot of time and energy to their goal. And yet, many of them fail. Why is trading so difficult and how to overcome difficulties? Read the article to get the answer.

Market volatility

Markets never stand still. They are constantly changing and evolving, this is part of their nature. Chances are, you won’t often see the same market conditions. The reason for this is the huge number of factors that affect the performance of traded assets.

Solution:

Practice strategies and techniques on a demo account with virtual money, carefully analyze the situation before entering the market and do not enter with a large bet right away.

Human factor

Human nature plays an important role in trade. Regardless of whether you consider it a disadvantage or a source of additional opportunities, nature cannot be ignored. After all, it is we, people, who open and close deals, buy and sell assets.

Solution:

How to cope with the human factor in trading any asset on any timeframe? There are several ways. As a retail investor, you will not change the behavior of other investors, but you can influence yourself. You’ve probably heard this before (and heard it more than once). All you have to do is eliminate, or rather, minimize the human factor in your own transactions. For this very purpose, try to get rid of emotions, both positive and negative, as they can negatively affect your trading efficiency. By trading according to strategy rather than intuition, you will be able to manage unnecessary human risk. Also, keeping a trader’s diary and following the rules of money management can help you with this.

An overabundance of information

Admittedly, the amount of information that attempts to explain how markets work has become a problem in itself today. Often, a novice trader cannot navigate the sea of ​​trading information on his own. Hence, another level of problems appears.

Solution:

Analyze your sources of information and in practice determine what helps you in trading, at the same time, do not hesitate to experiment and look for new sources of trading news and events.

Conclusion

As you can see, the complexity of financial markets stems from the complexity of their constituent parts. Today we have reviewed three of them. It is easier to work with complex systems when you break them down into small pieces. In this case, it is easier to deal with various difficulties consistently, and not to struggle with the entire system.