Enclosed you will find 6 common mistakes, made by the vast majority of forex traders -make anyone of them and you will join the vast majority who lose money, so here they are avoid them.
1. Trading Expert Opinion
All the forex news you see looks so convincing and today, we have TV channels and lots of resources on the net but there only opinions. They won't help you win. If they did, more traders would win than they did 50 years ago and this is simply not the case - the ratio remains the same. Sure, the news sounds convincing but chances are its wrong, as it reflects the views of the majority who lose.
News is discounted instantly by the market and its how it is perceived that determines the course of events. It's a fact that - most bear trends end when the fundamentals and news is at its most bearish and markets crash, when the news is at its most bullish.
2. Trading a Forex Robot with a Simulated Track Record
You can buy these online and they tell you that you can get rich for a few hundred bucks, you won't be surprised to learn - you can't. Most of these robots have great track records, the problem is there simulated over past data and won't help you make money - there not worth the paper there written on, we can all be rich if we know what happened and could trade it!
Get the right forex education and learn a forex trading strategy yourself to lead you to success. Leave these cheap, losing robots, to dreamers and lazy traders.
3. Trying to Predict Forex Prices In Advance
Prediction is another word for hoping or guessing and that won't get you far in forex trading. You can't predict forex prices in advance so don't try. Act on the reality of price change and trade the truth.
Many gurus sell scientific systems that claim they have found the formula for market movement and all you need do is follow them. If however markets did move to a scientific theory, we would all know the price in advance and there would be no market. Prices move because markets are uncertain not certain!
4. Day Trading or Scalping
A fantastic way to lose money quickly - it doesn't work and the reason is obvious:
It's impossible to predict what millions of traders are going to do, in a few hours. Because of this, all volatility is random and you will lose - period.
Ever seen a day trading system on the net with a real time track record? Neither have I - But I have seen lots of simulated ones!
5. Placing Stops Within In Random Volatility
Another common mistake is placing stops where there almost guaranteed to get you stopped out, as there within random volatility. If you want to avoid this, make learning about standard deviation of price, part of your essential forex education.
Forex trading is all about taking calculated risks at the right time and taking a risk. If you try to restrict risk to much, you actually create it and guarantee yourself to be stopped out.
6. Over Leveraging a Small Account
You can get up to 400:1 leverage with many forex brokers and most traders think the more they leverage they use the better - but they get stopped out quickly and their accounts are soon wiped out.
If you have a small account treat leverage with respect and don't use too much - if you do, you will soon be in the 95% of losing traders.
The above are all common forex trading mistakes and if you make them, you will lose but there easy to avoid and if you learn digest and avoid them, you can get on the road to constructing a forex trading strategy, for long term currency trading success.
