Here is a collection of 3 ‘Don’ts’ you, as a trader, should try to avoid. These tips can help both novice and established traders protect their funds and improve results.
1) Don’t spend everything you earn
Most people make a living, spend money on leisure and only then put aside the rest. Unfortunately, this way of accumulating funds is suboptimal when towards a particular financial goal. What you can try doing instead is save first, invest second and then spend. Remember not to get too greedy though, leave yourself enough money to enjoy your life. Creating a savings account and accumulating funds there on a regular basis can be a good option.
2) Don’t underestimate the emergency savings
A lot of people keep a relatively small amount of money aside for “emergency money.” This may help you with a last-minute plane ticket, but it won’t help much if you get sick or something comes up unexpectedly and ruins your plans.
It would be great if you could accumulate 6 months’ worth of your wages in your emergency savings and only use these funds for real emergencies. When your income or expenses change, make sure to increase your savings amount accordingly.
3) Don’t make emotional financial decisions
Instead of randomly buying and selling assets based on the so-called gut feeling, develop a comprehensive trading system and create a trading plan with long-term goals.
As you probably already know, it’s not always easy to keep your emotions in check. And that is exactly why it is so important to have a decent strategy that prevents irrational trading. Put simply, a trading strategy is a set of rules for when it’s safe (in your opinion) to open a particular deal.
NOTE: This article is not an investment advice. Any references to historical price movements or levels is informational and based on external analysis and we do not warranty that any such movements or levels are likely to reoccur in the future.
In accordance with European Securities and Markets Authority’s (ESMA) requirements, binary and digital options trading is only available to clients categorized as professional clients.
GENERAL RISK WARNING
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.
77% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.