Trading can be a frustrating experience if certain things are not going well. Some of these issues could be on the trader’s side or they could be as a result of issues from the broker’s end of the rope. Either way, they could lead to real frustrating situations in the market. Here are the top 4 trading frustrations.
- Slippage
Slippage causes all manner of frustrations. One of the most frustrating things a trader may see is the stop loss they set to cut losses fail to respond and prices to just keep moving against them until the bottom literally falls out. January 15, 2015 saw many traders suffer this fate after the Swiss National Bank ended its minimum peg policy. Many traders saw their accounts wiped out and several brokers either suffered millions of dollars in losses or were driven into insolvency.
2. Network Outage in the Middle of a Trade
Sometimes, the internet network could give up on the trader, especially when a dial-up connection is used. This may not be a problem, but will definitely lead to frustration if it is affecting the trader’s ability to close a profitable trade manually. This is especially so if the trade has a great chance of reversing its gains.
3. Requotes
Requotes can make a trader miss a good entry opportunity. Trying to enter a trade in a fast-paced market using a market maker platform could lead to requotes if prices are moving very rapidly. This is not too much of a problem unless the trader is trying to catch a news trade spike. However, it can be frustrating though not as much as the next frustrating scenario discussed below.
4. Stops Placed too Tight; Potential Good Trade Ends in Loss
This perhaps is the most frustrating experience of all. How does it feel to be right and yet so wrong? Some trades have a habit of going all negative before they turn to meet the trader’s expectations. If a stop loss was placed too tight, such price action behaviour could trigger the stop loss and close the trade in a losing position before turning the corner. This leaves the trader wondering what might have been.
These are the top 4 trading frustrations. If you meet traders who have suffered any frustrating situations in their trading activity, it is very likely that they would have suffered at least one of these. However, there is some light at the end of the tunnel. While you can’t avoid network outages, you can avoid slippage and requotes by trading with a broker that guarantees stop loss orders and offers fixed spreads that don’t change according to market volatility.
Risk warning: Forward Rate Agreements, Options and CFDs (OTC Trading) are leveraged products that carry a substantial risk of loss up to your invested capital and may not be suitable for everyone. Please ensure that you understand fully the risks involved and do not invest money you cannot afford to lose.Our group of companies through its subsidiaries is licensed by the Cyprus Securities & Exchange Commission (Easy Forex Trading Ltd- CySEC, License Number 079/07), which has been passported in the European Union through the MiFID Directive and in Australia by ASIC (Easy Markets Pty Ltd -AFS license No. 246566).
Speak Your Mind