Crude oil trading is somewhat of a risky ordeal, especially if you don’t know what you are doing. It is a market with many ups and downs, due to its volatile nature, it can prove to be quite unpredictable.
This can be a quick way to line your pockets, or lose your hard-earned savings in just a blink of an eye!
As we progress, through this article we will explore a few mistakes you can end up making, as well as how you can avoid them!
Software Is Not Your Bible
You will not be able to find sure-shot investments with the help of any software out there! Yes, do help you automate a lot of processes, and their complex algorithms help you hone in on some patterns.
Honestly speaking, this is merely a hypothesis, an algorithmic guess if you will! It is no substitute for good old-fashioned human judgment and gut instinct. However, algorithms can also help you make a good deal of profit you also back it with your own experience, and instincts.
When you are using top platforms like go url you will be able to easily make trades in the crude oil sector! Although the automated trading feature can be pretty dandy, that paired with your own expertise will take you a long way.
Jumping On-Board Without Proper Research
Something you heard while you were out for lunch with the gang, is not research! We may trust the source that we heard a tip from but that is not always the most reliable source of information.
This is where even the most experienced trader is prone to make a mistake. The best thing to do when you hear a promising tip is to also get some research done on your end to ensure that it actually checks out.
Just Because You Did It Once Doesn’t Mean You Can Do It Again
Right when you make a big trade you may feel perplexed to take another gamble, especially if it was extremely profitable. However, traders must understand that this is just a temporary high, and a spree of high-strung trades following such is never a good idea.
As we always hear, never take a decision when you are too happy or too sad. This sort of high, yields in a similar situation, when something like this goes down it would be advisable to take a little time to cool down.
It might even be a good idea to take a day or two off, to get yourself back to an equilibrium where you are once again thinking with logic rather than euphoria!
Learn To Cut Your Losses While You Still Can
Trading emotionally is one of the quickest ways in which you can ruin your career as a crude oil trader. This is not only after a hugely successful trade but perhaps trading recklessly after a bad one can be worse!
Holding out hope that your investments will pan out is not always bad, but it can also be one of the reasons the whole boat sinks. It is essential that you stay on a need-to-be basis and keep the whole process merely objective.
It may indeed be quite compelling to let trades that keep losing run on, just because you expect it to eventually take a U-turn, but that is not a great strategy!
That ends up holding you back from making other sweet trades which could bring in even more profits for you than that one. Day trading hinges on the market swing, and the ability to capitalize on the market’s volatility.
The best way to protect yourself is to put in a stop that automatically steps in and shuts down a certain position based on current market activity.
Over Investing And Overexposing
Seen a good rise in a certain market? Well, as hard as it might be to hear it may be time to close it and take your profits. Continually investing more and more just because it is rising does not bode well in the long run.
Although the inherent profitability of a trade could be significantly increased by investing in a rising market it is like a ticking time bomb, the risk factor goes up with each passing second.
In an unpredictable market like this one, it would not always be a great or even advisable strategy.
Failing To Plan
When it comes to trading successfully one must ensure they have a suitable plan in place. Whatever the case might be you must be able to trust your plan! Although it is tempting it may not be a good idea to diversify and step out of your plan.
The most reliable way to make a plan is through your own personal experiences. How can you do this?
You can start keeping a log of all your trades, the good and the bad, why it worked and why it didn’t! In this way, you will be able to eventually piece together a plan that works for you.
Risk To Reward Ratios Matter
This can prove to be one of the biggest lessons you learn as a trader, and the most essential thing to take away as a beginner. How much do you stand to make and how much could you potentially lose, and is it worth the risk?
As you accumulate more experience you may tend to be open to a higher risk ratio but it goes without saying, don’t get cocky!
Summing It Up
Mistakes are an inevitable part of trading, and every trader out there has made a mistake at some point. It can all come down to how you take it after a bad trade, and how you plan to overcome the temporary setbacks.
Moreover, traders must realize that the most reliable resource out there is themselves! That proves to be the most important thing one can realize. Every person has their own way of trading and must devise a plan best suited to them.
With that, we hope you will be able to successfully make trades, in a cautious manner such that you will not regret it later on!