The 3 important actions that you should avoid which can improve your trading account

In this article, we will discuss 3 important actions that you should avoid at all costs which can directly impact your trading account. Although these actions do not generate profit like we use to discuss trading strategy however if you fall into one of these actions you could lose all your money in your trading account.

1. Do not over-leverage

In most CFD platforms the common leverage given will be 1:100 or can be as high as 1:400. However, leverage is always a double edge sword. You can generate huge profits with a single trade, but it will lose all your money as well. We strongly do not encourage maximize your lot size simply no one will know your outcome of the next trade despite your strategy have a strong winning edge. A trader needs to stick to their money management rule and do not over leverage in one trading position.

2. Do not overtrading

The new trader often got addicted to trading especially they have a few wins in their trading experience. The cause of over-trading can be due to greed or revenge trade. The greed comes in after a series of winning trades and they start not following the strategy due to overconfident or feeling of they can beat the market. They start to enter more trades that the system tells them to do so. When a series of losing trades happen the trader will enter revenge trade until they lose all the money and create fear in trading.

3. Do not use the money you cannot afford to lose

Have you ever heard of people invest in the market to lose money and commit suicide? Most probably you have heard of this or similar story. The issue is not the market but rather lack of financial education and they have violated this rule: Do not use the money you cannot afford to lose to invest in the market. When come to investing you must prepare the lose all the money. The mentality of prepare to lose all the money not only helps in your trading but also will help in your psychology during the entire journey of investment.