Which type of mistakes should never be done while placing a trade?

<p id="isPasted"><strong>1. Using high amounts of leverage </strong></p><p>Leverage is a double-edged sword. It allows you to take a large position by just depositing a fraction of the trade value. Using high leverages you can significantly multiply your profits if the trade goes in your favour. However, if the trade goes against your expectations, you can also end up making severe losses.&nbsp;</p><p>To avoid making this mistake, always make sure that you use low amounts of leverage. Only use leverage up to the point that you can afford to lose. This way, you can protect yourself from downsides to a large extent.&nbsp;</p><p>&nbsp;</p><p><strong>2. Not paying attention to technical trading indicators</strong></p><p>The day to day price movements in the currency market are influenced by technical factors. Getting into forex trading online without understanding or paying attention to technical trading indicators is a surefire way to experience losses.&nbsp;</p><p>To avoid making this mistake, initiate trades based on technical trading indicators like MACD and candlestick patterns. This will help you anticipate the price movement and take positions accordingly.&nbsp;</p><p>&nbsp;</p><p><strong>3. Revenge trading </strong></p><p>Experiencing losses is a part and parcel of online trading. This is true even in the case of the currency market. However, many traders tend to succumb to revenge trading when they face a loss. Revenge trading is when an individual tries to put more money into trading in the hopes of getting back what they lost.&nbsp;</p><p>This is however a bad idea. Succumbing to emotions when trading will lead you to make wrong decisions. To prevent this from happening, always take a few days off after a loss to recover. In the meantime, analyze and reassess your loss-making trade and try to find out where you went wrong. This exercise will help you become a better trader.&nbsp;</p><p>&nbsp;</p><p><strong>4. Taking positions anticipating the news </strong></p><p>A large number of traders, usually beginners, tend to make this mistake. They place trades just before a major news event in the hopes of cashing in on the volatility. Such a move, however, backfires more often than not.&nbsp;</p><p>When it comes to forex trading online, the price movements can be very unpredictable during times of high volatility. Even if the news event is favorable, the price movements in the currency pair may not reflect appropriately.&nbsp;</p><p>The best way to avoid making this mistake is to refrain from making any trades before any news event. Wait till after the news event before initiating any trades and let the volatility die down first.&nbsp;</p><p><strong>Conclusion</strong></p><p>Before you initiate a forex trade, always formulate a plan and stick to it. Also, place appropriate stop losses to limit downsides. That said, if you’re someone who wants to get into forex online trading, get in touch with Motilal Oswal right away. You can open a demat account and a trading account online within just a few minutes, which is a prerequisite for forex trading.</p>

<p id="isPasted">To keep your account alive, treat these mistakes as absolute "no-go" zones. In trading, your success is defined more by the mistakes you avoid than the "great calls" you make.</p><p><strong>1. Trading Without a "Hard" Stop-Loss</strong></p><p>Never enter a trade with a "mental stop-loss." In a fast-moving market or a news event, your "mental" exit will vanish as you freeze in hope. A hard stop-loss must be placed in the broker's system the second you enter.</p><p><strong>2. "Averaging Down" on a Loser</strong></p><p>Adding more money to a losing position (buying more as the price drops) is the fastest way to blow an account.</p><ul><li>The Logic: You are doubling your risk on a setup that has already proven your initial thesis wrong.</li><li>The Exception: Only add to winning positions (scaling in).</li></ul><p><strong>3. The "Lot Size" Guess</strong></p><p>Never hit the "buy" or "sell" button without knowing the exact dollar amount you are risking.</p><ul><li>The Error: Trading 1.0 lot on every trade regardless of how far away your stop-loss is.</li><li>The Fix: Use a Position Size Calculator. If your stop-loss is wide, your lot size must be small. If your stop is tight, your lot size can be larger.</li></ul><p><strong>4. Revenge Trading (Emotional Entry)</strong></p><p>Placing a trade immediately after a loss to "get your money back" is a catastrophic mistake.</p><ul><li>Why it's fatal: Your brain is in "fight or flight" mode, not "analytical" mode. You will likely ignore your rules and over-leverage to make the loss back quickly.</li></ul><p><strong>5. News Gambling</strong></p><p>Placing a trade seconds before a high-impact news event (like US Non-Farm Payrolls or Interest Rate decisions) is gambling, not trading.</p><ul><li>The Trap: Slippage and spread widening can execute your stop-loss at a price much worse than you intended, costing you far more than your 1% risk.</li></ul><p><strong>6. Over-Leveraging</strong></p><p>Using your entire available margin to take a "massive" position because you are "sure" about a move. One 20-pip spike in the wrong direction can trigger a margin call and wipe out months of progress in seconds.</p><p><strong>7. Changing the Plan Mid-Trade</strong></p><p>Once a trade is live, do not move your stop-loss further away to "give it more room." If the price hits your stop, the trade is over. Moving the stop is simply delaying the inevitable and increasing the damage.</p>