Key mistakes and how to avoid them
More analysis about Gold:
As a beginner trader, you may make mistakes that significantly affect your financial results. The first one is neglecting transaction costs. Let's say you buy a gold contract worth 10,000 PLN with a slippage of 0.5%, which adds an extra cost of 50 PLN. If your strategy assumes a profit of 1%, which is 100 PLN, then after accounting for slippage, the profit is halved. The second mistake is a lack of understanding of seasonality. Oil tends to rise in winter due to increased demand for heating, which can lead to unexpected losses if you trade blindly. The third mistake is improperly setting stop losses. For example, if you invest 15,000 PLN in gas with a 5% stop loss, and the market drops sharply, you could lose 750 PLN; however, with poor slippage, the loss could be much greater.
These errors lead to unpredictable outcomes that can strain your capital and discourage you from continuing to play in the market. Slippage and poor timing can cause your profits to vanish before they even appear. Market mechanisms, such as spread and volume, are often underestimated, and their impact on the financial outcome is crucial. Without a solid plan and understanding of these elements, every transaction is more of a gamble than an investment.
Assume you have a capital of 15,000 PLN. If due to slippage you lose an additional 2% on each transaction and you make 10 transactions in a month, the slippage alone costs you 3,000 PLN per month. Adding unforeseen losses due to seasonality and poor stop loss settings, you can easily lose another 1,500 PLN, which gives a total loss of 4,500 PLN per month. That's as much as 30% of your capital.
Here are a few steps to improve your results:
Daily review and analyze your trades to understand what works and what doesn't.
The report on unemployment claims is a key indicator of the labor market condition in the USA. A high number of claims may suggest a weakening labor market, which impacts monetary policy decisions. Investors monitor this data to assess future economic directions. **Watchlist:** DXY reaction, UST yi...
Core PPI m/m is an indicator that measures changes in producer prices of goods, excluding food and energy. It is significant because it indicates inflationary pressure at the producer level, which can influence monetary policy decisions. An increase in the index may suggest rising production costs, ...
Core CPI m/m is an inflation indicator that measures changes in the prices of goods and services, excluding food and energy prices. It is crucial for assessing inflationary pressures in the economy and influences central banks' monetary policy decisions. **Watchlist:** DXY reaction, UST yields, cre...
