The commodity market is easily accessible to all and one of the largest markets in the world. However, amongest the slew of millions of investors, there are only few that are truly successful. The traders in commodity fail for the very same reasons that investors overlook in other trades. The principles and the concepts across all trades remain the same, what changes is the technique and strategy.
Many traders borrow far too much capital from the market in the name of leveraging that leaves the investor with little or no option to make small low-risk mistakes. Sometimes, the greed gets better of them and they take far more risk than they can handle. Here are some potential hazards that can impact successful trading in commodity trading market. Disregarding the importance of discipline Trading decisions are not to be controlled by emotions at any given time. This is the biggest error of judgement any trader makes. A successful trader is the one that has large gains in his kitty while sustaining few small losses. When the trader faces huge losses, it can be emotionally taxing and can entice them into taking hasty decisions forcing them to lose faith in their assessment. When you try to beat the market and give in to fear or greed, you are virtually digging your own proverbial grave. A well constructed plan that is dictated by logic and not be emotions will always help you sail through even the toughest situations. No clear plan of action No matter where you are investing, but entering without a clear plan of action can be suicidal. It can never be stressed enough what the true importance of planning is, especially in case of investments. A successful trader will always work within his documented plan of action while taking risk management into account at every step. His return on investment is articulately defined at every step of the way. There are many pitfalls that you can avoid by simply adhering to your strategic trade plan. To have no plan is nothing less than selling yourself short when it comes to prospective accomplishments in the commodity trading in India. A successful trader will try to speculate unlikely events and will have a contingency plan in place, should such a thing happen. You can keep yourself ahead of other traders by just being more informed and by evolving with the changing market.
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September 2017
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