Why trading against the trend is equivalent to suicide mission

There is an old saying in the Forex market that trend is your friend. Though it is the most common dialogue for all the retail traders in the online trading community very few of them actually follows it. Most of the novice traders, whether they are looking to buy stocks in oil, pharma, or even cryptocurrency by buying Ripple stocks (ripple aktien kaufen), start their trading career without having any prior knowledge of this industry thus they trade the market with emotion. In order to become a profitable trader, you must learn the perfect way to trade the market without any emotion. In the United Kingdom, the novice traders are often told to demo trade the market for the first three to six months so that understand the nature of this market. But most of them don’t trade the market using the demo account and ultimately they end up by losing a huge amount of money. If you do some extensive research then you will see that only the professional traders are trading in favor of the trend. They know very well that trading against the trend will cost them a huge amount of money.

Market trend always dominate the price movement

All the financial instrument always tends to follow the prevailing trend. Sometimes you will often see some minor retracement in the currency pair. This is where the novice trader steps into the market trap. They simply think that the market is too much overbought or oversold and it’s the perfect time to catch the new trend. They simply start trading in the opposite direction of the trend until their first trade hit the stop loss. After their first loss, they become desperate to recover their loss and trade with big lot size. Sometimes taking excessive risk will help you to recover your loss but in the long run, this will be the main obstacle for your successful trading career. So it’s your decision whether you trade in favor of the trend or lose money by counter trading.

Lack of trading knowledge

Becoming successful in any profession requires an extreme level of hard work. The new retail traders in the CFD trading industry often thinks there is nothing to learn in the world of trading. All they need to do is to execute their orders and profit will come to them automatically. But when it comes to real situation things are not so easy. You need to learn all three major forms of market analysis in order to find the high-quality trade setup. Try to learn all the basic details of this market and trade in a demo account until you feel comfortable with the trading system. If you not sure from where to start then you should consider taking some paid course. When you spend money on education it’s never wasted. You will always learn something valuable which will come very handy in your professional career.

Do the fundamental analysis

The majority of the traders in the online trading world trade the market based on technical analysis only. But if you look at the professional traders then you will be surprised to see that most of them are putting a great deal of emphasizing on the fundamental analysis section. Without learning the fundamental analysis you will never be able to measure the strength of the prevailing trend. During your early stage all the economic data release and political speech might seem like a puzzle to you but if you analyze the financial data for at least one month then you will understand the market trend very easily. Last but not the least, never trade the market with any amount that you can’t afford to lose. Consider trading as your alternative source of income for the first two years.

Summary: Trading against the trend is just like catching a falling knife. All the successful traders are profitable only because of the respect the trend of the market. When you do your technical analysis, find the existing trend of the market in the higher time frame and focus on quality trade execution.

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