We sat down for coffee with Partnership Executive, Justin Paulsen, to talk about the mistakes traders make when they're starting out.
Here's what he had to say:
The number one mistake traders make is not sticking to their risk to reward ratio. A recent analysis, done by a big forex trading research company, showed that traders choose the correct direction of the trade more than 60% of the time, but they still end up losing money.
How could this be so?
The reason for this is that the size of the losses exceed the profits and majority of traders close their trades instead of sticking to their risk to reward ratio and letting their trade plan run out or run its course.
What's a Risk to Reward Ratio?
We call it an RRR - simply put, it's the ratio of how much you are willing to risk vs. how much you are willing to make in a given trade or given period of time.
What is the biggest trading lesson you've learnt? Share it with us or ask us a question in the comments section below.