Common mistakes while doing the technical analysis

technical analysis

The Forex market is traded based on three major types of market analysis. The technical analysis gives the retail traders a unique ability to find the perfect buying spot. By using technical tools, traders can easily asses the highs and lows of the market and find the exact point from where the market will start to change its direction. On other hand, fundamental factors are used to assess the strength of the market trend. The third form of market analysis is known as sentiment analysis and it allows retail traders to improve their trade execution process.

There are things you need to learn when you do the technical analysis. Many naïve traders in Hong Kong often lose money because they don’t know the perfect way to analyze the technical data. Read this article to avoid the most common mistakes in technical analysis.

Trading the lower period

Naïve traders in Hong Kong often analyze the 1 minute time frame to find the perfect trade setups. They forget about the conservative method and try to find high-quality trades in the lower time frame. But finding the perfect trades in the lower time frame is a very challenging task. You can’t make consistent profit by analyzing the 1 minute time frame. To make things easier, you should learn to deal with the higher time frame. Even if you want to trade the lower time frame, learn about multiple time frame analysis so that you don’t have to lose a big portion of the trading capital.

Trading with high risk

Trading with high risk is very common. After analyzing the different stocks, the traders often think they have found the perfect asset to trade. Eventually, they increase the risk to a great extent and try to earn a huge amount of money. But this is not how things work. You should always try to trade the market with low risk so that you don’t have to lose a big portion of your trading capital. Once you develop the skills to trade with the low risk you will see the change in your trading approach.

Trading against the trend

During the technical analysis process, the naïve traders always try to find the trades against the major trend. They think this is the best way to earn money at trading. If you want to survive in the retail trading business, think about the trend trading strategy. Trading with the major trend and looking for quality trade setups is the only way by you can ensure profit. To become the best trader you can be, you should act as the best trader. Forget about the aggressive approach and try to improve your skills over some time.

Trade without any discipline

If you intend to make any profit, you should always trade the market with discipline. Without following strict discipline in each trade, it will be nearly impossible to make a profit. Most of the naïve traders are losing money since they don’t have the skills to deal with the complex market. They break the rules and try to earn a huge amount of money without learning about the core factors. On the other hand, the senior traders are always placing trades with managed risk. They break the rules at trading since they know the consequences of trading the market with high risk.


Avoid making the mistakes mentioned in this article. If you think trading is the perfect profession for you, make sure you never break the rules. Take your steps based on precise calculations. Keep on learning so that you don’t have to lose a big portion of the trading capital. Once you become good at trading, you can slowly learn to deal with the complicated nature of the Forex market. This will make you a professional trader within a short period of time.