This is a beginner mistake. Not knowing where to find trade opportunities or not being familiar with the technical tools that help you identify zones, levels and lines, how to read signals and indicators correctly.
Buying when the market is up, or how we say, “on a top”, increases your risk potential and minimizes your potential profit. Even though buying when the market is up can be profitable in the long run, why depend on something that is not is not reliable, and carries more risk than reward as a potential outcome?
Avoiding this mistake is a little tricker: before buying or selling, learn about support lines, moving averages and other indicators to make an informed decision.
Buying closer to support lines, moving averages and other line indicators and selling closer or the other way around for selling actions, will give you a better chance to fix a part of your unrealised profit at these zones instead of trading at a loss.
As our lessons progress, we will talk more about these indicators so that you are able to determine your buy/sell strategy accordingly.
Until then, here are a couple of tips to get you started :
when the market approaches a top, you should fix the profit you made with the trades you started back when the market was closer to a bottom.if we are talking about sell trades, you should open trades not far from the top and close them close to a bottom, thus fixing profit.
Sounds simple, don’t you think ?