3 main trader’s mistakes when trading a forex robot

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Greetings, fellow traders!

In this article, I will highlight the main trader’s mistakes when trading forex advisors. Although this article will cover rather trivial issues, it is a very important material. Therefore, be sure to mark new moments for yourself on the sheet, and if you have any questions, be sure to write them in the comments.

Mistake 1 - misunderstanding the strategy of the advisor and money management

Trader's mistake

Wrong size of the deposit and starting lot

Incorrect selection of the deposit and starting lot for a forex advisor is common trading mistakes of a trader. However, this is a very important point that 95% of newbies do not pay attention to when trading in the forex markets.

For an accurate understanding of the deposit and the starting lot, you first need to understand:
common trading mistakes

Misunderstanding the strategy of a trading advisor

Trader's mistake

The ambiguity of the strategy of a trading expert is also included in the trader’s mistakes when trading a forex robot. If you are looking for an advisor for forex trading, then 95% of all advisors will use averaging / martingale positions. This is due to the specifics of the market, and the fact that most of the time currencies are in a flat (range in English). Accordingly, the trader must understand that the strategy of an expert advisor does not end with one deal and in most cases the series will consist of 3-7 deals with a gradual increase lot.

For example, if a trading advisor uses averaging, and you allocated a $ 100 deposit for it, then this is a deliberately failed idea, because you simply cannot stand a series of consecutive trades against you, which is quite normal for an averaging strategy.

In short, for forex advisors using averaging / martingale, you should select a deposit of 2500 digits for the minimum starting lot of 0.01. It is important to know what step is used between averaging orders and how much the lot of each next deal increases, because this is one of the main trader’s mistakes when trading. After that, until the moment of trading, it is important to look at what rollback in points your deposit will be enough for, if this distance is too small, then most likely your account will not be enough for correct money management in the advisor.

Important!!! If your real account is small $ 100 - $ 500, then I highly recommend opening a deposit with the same amount only on a cent type of account. This will allow you, having a small amount, to correctly distribute capital and put the adviser on a large number of pairs for trading, because $ 25 on a cent account type will have the necessary 2500 characters, and with a $ 100 deposit you can take 4 pairs into work and trade the advisor calmly rather than drain the deposit for 4 transactions against you.

For trading robots using a fixed SL, everything is a little simpler, but still there are some nuances.

First of all, look at what type of SL the forex advisor exposes, it can be sl in points or sl in% to the deposit. For the two indicated options, you need to calculate the expected drawdown if you use the number of instruments on which you are going to use this Expert Advisor. And if in total your deposit is ready to transfer such a drawdown, then you have chosen the size of the deposit and the starting lot correctly.

Mistake 2 - lack of an additional tool to control expert advisors

common trading mistakes

It will be very important to have an additional trading advisor to control the overall risk for all trading robots. Which, if something happens, will be able to close all transactions on the account and cut losses in time by disabling all advisors on the account.

SoftimoTrade has such a free trading advisor Risk Manager, which will be able to control the risk on the entire deposit and, if it is exceeded, it will close unprofitable trades.

Trader's mistake 3 - high profit expectations

Trader's mistake

Another typical and very common trader’s mistakes is excessive expectations regarding profitability that do not correspond to reality. One of the problems of leaking by advisors is, of course, the pursuit of excess profits. This problem is associated with placing a large lot for trading and, accordingly, the necessary money management collapses and, as a result, the advisor can drain the deposit.

In order not to make mistakes in trading, do not make such mistakes in trading and remember that an advisor for forex trading is not a grail that will open 100% correct transactions. Therefore, you do not need to set the starting lot more than the advisor’s author recommends. Additionally, you need to focus on the average profit in the market, for example, for the forex market, the average profit for automated robots is 3-7%. All that goes more is already inflated risks, they have the right to exist, but you must understand that most likely the risk will be comparable to 100% of your deposit, if you are ready for this, you can increase the risks.

Go to the market and select a trading robot

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