Often the obvious is overlooked by so many people: many
before them have made these fatal mistakes, yet, they go on and make them
again. This just doesn't make sense. There is a well known saying about the
definition for stupidity…… keep on doing the same thing, but expecting a
different result.
If you are serious about your Forex trading, you should
learn from the mistakes of others and make sure you don’t repeat them.
Wrong use and timing
for Stop Losses
Stop Losses certainly are important in Forex trading, but
using them in the wrong way can also cause you more harm than good. You might
be thinking of putting a cork in the money leak, which is fine, but strategy
and the right timing is also important. Proper money management should be at
the top of your list.
You should be able to determine where to place your stop loss before entering a trade. Once you have placed your stop loss, it shouldn't
be moved. You also need to give your trade some “breathing space”. Traders often lose out on good profits
because of trades that are closed to early.
Leverage
Make sure you know exactly how to utilize leverage
in a proper and responsible way. You really might be tempted to go for that
400:1 leverage, thinking about that instant profit that is going to come in……or
is it going to be an instant loss? Remember; the higher the leverage, the
higher the risk. If you start using higher leverage just for the sake of
getting those bigger profits faster, you are gambling and you might as well go
to the casino. Don’t give in to the excitement of fast money, stick to your
strategy. Actually, if you want to trade because you think you will get rich
quickly, stop trading. It is not going to happen.
Using signals and indicators
There is nothing wrong with signals and indicators, but
remember, that is exactly what they are…..signals and indicators. They are
there to assist you and give you clues to enable you to make informed
decisions. You first need to have your strategy in place, and then if you want
to use an indicator, find one that will fit in with your strategy. If you
really want to use an indicator, try to stick to only one that you can really
specialize with. Using too many indicators become confusing.
You still need to work. There is no magic formula that you
can apply (or plug in) and all the work will be done for you.
Day Trading
You might think that day trading is more profitable and
holds fewer risks. This might be true for some traders, but first start trading
on a demo account to find out whether you will be successful with day trading.
Day trading often ends up in over-trading if you don’t know what
you are doing and will only eat away at your profits. Trading less often,
analyzing the markets, knowing exactly what you are looking for before you
enter into a trade, often ends up to be more profitable and far less stressful.
Using “Miracle
Software”
There are so many software programs and trading robots out
there that promise huge profits. You supposedly just plug it in and watch the
profits come in. I cannot say there is nothing out there that doesn't work but,
I haven’t seen it yet and secondly there is no software out here that is
foolproof. Once again I am sorry to say, but you will have to do the work.
Emotions
To become an expert trader, you will need discipline,
objectivity, calmness and clear thinking to enable you to make sound decisions.
If you allow fear to get hold of you, forget about profit. Become reckless, and
you will lose your money sooner than you think.
Educate yourself about Forex trading and prepare yourself.
Get your strategy in place and stick to it. Don‘t become obsessive about Forex
trading. Study other traders, follow and copy what the experts do. When you
pick up on mistakes made by other traders, make a note of it and don’t make those same mistakes.
Let Us All Learn From
Mistakes
How about you? What mistakes have you made yet? Share it
with us and let us discuss it in the comments below. This way everybody can
learn from one another.
No comments:
Post a Comment