Forex trading isn’t hard, but there are a bunch of rookie forex trading mistakes that can throw a new trader off. Here we look at some of the most common, so you can avoid them.
There’s an awful lot of Forex trading information out there at the moment. While it’s a blessing for seasoned traders who remember not being able to get access to any information easily at all, it can be a touch overwhelming for beginners. News variables aplenty, tons of ‘systems’, tons of software, tons of trading platforms- how do you make a strategy though all this noise?
Don’t get us wrong- thinking is good. Just be careful it doesn’t veer into the territory of overthinking. Price action is your friend here.
One of the most common forex trading mistakes rookies make is jumping here, there and everywhere. If you trade too often, you lose the chance to make money on the market in the long-term, and that’s where seasoned Forex trading actually occurs. It’s well known that people who did brilliantly on demo accounts often start to trade poorly when it’s real money. Why? Emotion comes into play, and that is your worst enemy. Don’t trade without a plan. Don’t trade when that pre-determined trading edge from that plan isn’t there. Trades quickly add up fees and commissions, and jumping all over gives no space for recoveries in your favor. Don’t turn it into a gamble…trade slowly and with thought. For this reason, don’t be too keen to get rid of your demo account and start trading real money too soon. Rather learn where mistakes don’t matter.
Risk management is what will help you reach that comfort zone in Forex trading. It help you keep potential losses tolerable. Of course, you could lose any time you trade. Why risk a loss you can’t stomach? Make clever use of the inbuilt systems like stop-losses that help prevent you making this forex trading mistake. Don’t be tempted by unrealistic expectations- stick to your plan.
Simple question- but do you? So many rookies jump in without a plan, or try and keep it ‘in their heads’. Nope, this isn’t how to do Forex trading with the success you deserve. Remember, we don’t want to ‘gamble’ or court risk. And you do that by having a solid plan to help prevent you from trading emotionally. Write it down and stick to it.
While we certainly advise practicing Forex Trading until you are comfortable with a demo account, remember you will have to make the swap sooner than later. When you’re achieving success on demo, take that plan over to the ‘real’ world and stick to it.
Forex trading isn’t hard, if you avoid these common forex trading mistakes and keep a level head on you. Good luck!
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HIGH RISK WARNING:
Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.
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