The basic problem of novice is that he forgets why actually he came to the market and begins screwing around, having a very indirect relation to the income gaining. It is certainly assumed that a man was going to have some income at the market. If a primary purpose was some other, than it is hard to say, whether a trader is wrong losing money at the stock exchange or vice versa, everything goes according to plan.

If, nevertheless, an initial purpose was income gaining, all trader’s activity should be submitted to this purpose, and all surplus desires should be cast aside as interfering with work. And there are lots of such desires. In fact, when business concerns money, one of the strongest psychological stimulants, it is hard to keep sound mind and sound memory. Psychology, however pressed is, finds loopholes and influences on the process of taking decisions.

At first the trader-beginner doesn’t play against the market, he plays against himself first of all.  He fights against own emotions, against delusions, cast by revelations of “common sense”. And this in that case, if a man indeed fights, i.e. he is initially warned about danger and guesses, at least, approximately, where to wait a blow from. If not – emotions seize him and lead their road away, having nothing in common with a road to long-term and successful trader career.

Too short timeframe

A player can think wrongly that game at the stock market it a sort of computer game, where everything decides possession of an instrument and speed of response. Many traders firstly start playing intraday. Since at such scales game results of novices probably will be casual, and the component of transaction costs in a deal is extremely high, this period as a rule doesn’t last too long and after selling of substantial account part the trader starts reflecting.

Can say, that the longer the timeframe, the simpler to play it and get quite good results. The best strategy is simple – Buy & Hold. The shorter timeframe, the bigger experience, knowledge and discipline are needed, in order additional possibilities of short timeframe would bring benefit. Optimal timeframe, perhaps, is about a couple of weeks, i.e. opening the position is better to bear in mind its closing at least in a few days in case of favorable course of events.

Absence of strategy

Each self-respecting novice understands clearly that the schedule speaks for itself. You can glance at the schedule and see where price will be in a couple of hours. Therefore trading is a simple activity – it is necessary just to glance at the schedule and open position in the direction of this cherished place where the price will appear. And then relax and look how income drips. So affairs look in a theory.

Life, however, makes allowances. The price doesn’t always go the right way. The price can turn and go reverse. And such sudden unexpectedness can unsettle the trader; after all such course of events doesn’t quite fit in his plan. Actually, it doesn’t fit because there wasn’t any plan initially.

Entrance in the dark

Any novice, appearing in the atmosphere of auction and with a deposit, craves entering the position quicker. The trader is eager for humming activity. He can suppose that trader’s work is to be in some position in every specific moment of time. He can’t suspect that sitting in cash can also be a part of work. In any case, he looks for any convenient grounds for position opening. For example, if nothing promising is observed on the chosen timeframe, it is possible to choose a timeframe shorter and look there. However, a signal for an entrance will be found on some timeframe.

Loss outstay

If some misfortune happened and the market went another way, not everyone would find courage to take done losses as a fact and close position out of harm’s way. It is simpler to sit in place unmoved, convincing oneself that everything returns now, certainly returns. In fact just now an account was nice and fresh, an income was almost in a pocket – and here you get a loss. In fact if close position now, such exhilarant recollection about that all was great, will go irrevocably away and become a property of history. And losses will become a property of cruel reality.

An action “to close position” turns into the sacral act of bridges’ burning. Bridges into the bright past that were there just now, but have passed away and insidiously have promised to return.

This light myth about “just a little and everything comes back” is supported by common sense, which, watching the market volatile, concludes, that if wait a bit, it is possible to wait for any price. More frequent it is so, however under unfavorable set of circumstances a question about closing of position can be put aside for 6-12 months, during which a loss can reach dozens percents by account. Of course, playing in long and without leverage, otherwise it is sadder.

Excessive risks

Human desire to earn a lot of money as quicker as possible is qiute understandable. There are two methods of income increasing from trader activity. The first method is hard and requires some mental activity – it is work on strategies, reduction of risks, increase of payment and other. It is, actually, trader’s job. But there is the second method, simpler and more elegant. One can simply increase risks and take a leverage. It is clear, that in case of successful trade the second method will give more pleasant, in income sense, result. If take a leverage 1:5, an income will be five times more, at the same amount of movements at the market. But it is again in case of successful trade, which, if taking the trader-beginner, can come out rather by set of circumstances, than by some talents and skills.

However happy set of circumstances is as probable as unhappy one. And in last case not incomes would be increased, but losses. Thus, even without leverage traders often avoid limiting and estimating possible losses; with a leverage trade probably will be in natural way limited by a broker.

Three useful rules

First rule. Don’t have complexes concerning you are out of market!
Many traders-beginners, having seen the schedule, begin to look for possibility to buy or sell. Completely wrong. There can be simply no possibility, moreover, it is quite normal, that not a single position will be opened during a day. One needs to take for granted, that you have been waiting for a necessary moment for a week, have opened and have lost a deal. And it can happen, one enters the market several times a day, if the system says so. So don’t open a position only because you are out of market. Act on beforehand planned system or set of rules.

Second rule. Cover unprofitable positions!!!
If a price does not grow – it falls. Hope that it will slightly roll away and then go in my direction is a waste of time. If you don’t put short stops at intraday, than you should have a heavy hand and cool mind to protect from improper market’s behaviour at first signs. By the way, it is useful sometimes to look at the 1-minute schedule at closing. The dynamics of prices is clearly seen there – when speedup and closing take place. Cover both unprofitable and profitable position one needs quickly and in time. In intraday, where an account goes on pips – there is no time for meditations. That’s why this type of game requires rapid taking of correct decisions and large nervous strain, as many people lose money at that, or simply pass on to more quiet trades. So – cover quickly, but correctly.

Third rule
Know all levels of that range in which you will play during next days. Classify them as key, strong, middle and insignificant. Force is determined by scale of the schedule (levels of 4-hour schedule are stronger than 30-minutes one), by the number of reproductions from the desired line (the more reproductions, the stronger is a level), by speedup which has gained the price after level’s break. Depending on the got results, the decision is taken about stoploss first of all. About Take-profit (however many oppose to limit order, in intraday it is one of the best methods to skim the cream. Movements at times are too short and rapid to think over for hours), decisions are taken about expediency of entering into a deal. If the system says “sell”, and level is 15 points below, it casts doubts on the accuracy of decision. On the other hand, two or more levels, located one after another at a distance of 10-20 pips, give a good chance to put a reliable stoploss over the more distant level (during the game on a turn at neighgbour), or exactly to define the moment of income drawing. Passing of double levels from a first attempt is highly unlikely.