Forex trading for beginners is straightforward if you have the right mindset and get the right forex education however, you must avoid the mistakes enclosed which will slash or even worse wipe out your equity...
Here are the 10 most common mistakes in no particular order of importance - there all important.
1. Don't Day Trade or Scalp
All short term volatility is random, you can't measure what millions of traders will do in a few hours so don't try.
2. Avoid Most Forex Robots
I see these forex trading systems all the time and they all claim great profits but the track records are all simulated in hindsight and have never been traded.
If you trade one of these you can kiss goodbye to your equity.
3. Don't Predict
If you predict you are simply hoping and guessing and that won't get you far in currency trading or life - trade confirmation and the reality of change and don't guess.
4. Markets do Not Move to Science
Many people claim they do and follow the methods of Gann, Elliot and Fibonacci but they don't work.
If markets moved to a scientific theory, we would all know the price in advance and there would be no market - common sense yet, many traders fall for this ridiculous idea, don't join them.
5. The harder you Work the More You Make
In a normal job yes, in forex markets no.
You get paid for being right with your forex trading signal and that can take you ten minutes or ten hours - you earn your rewards for results.
Work smart not hard.
6. Following expert Opinion and News Stories
The markets are a discounting mechanism and news is discounted instantly, it also reflects the greed and fear of the crowd who lose. Will Rogers once said:
"I only believe what I read in the papers"
He was joking of course - but it's surprising how many people follow the news and try and trade it - don't do it!
If you do, you will end up losing.
Markets move on trader's view of news and their emotions. The facts are unimportant its how they are perceived that determines the course of events.
7. Using a complicated method
10 indicators are better than 2 - dead wrong.
A complicated forex trading strategy , will not as a general rule beat a simple one as it has to many elements to break.
Simple systems have and always work best, as they are more robust.
8. Making Money in Demo Account Means You Will Make Money for Real
No, a demo account helps you learn how to trade not to make money and you need to understand this:
There is no pressure on you and therefore it's not a real trading experience.
9. Not Being Patient
Many traders think the more they trade the more they will make - wrong. You get paid as we said earlier on for being right and that means waiting for the high odds trades.
I know traders who trade around 10 times a year and make 200% or more.
If you want fun and excitement do something else. If you want to make money, being patient is a key element to learn in your forex education.
10. Snatching Profits to Soon
When you first start trading, you will be tempted to snatch profits - but look at a forex chart - the big trends last for months weeks and years.
if you have the courage to hold them and take short term equity swings against you, you will be well rewarded when the trade is finally closed with a thumping profit.
Traders have more problems holding profits than they do cutting losses, don't make this mistake.
Now here is the major problem that causes most losers to lose - I will ask you the question:
What's your trading edge defined? i.e. why will you win, when the vast majority 95% of traders lose?
What's Your Edge?
Don't know what your trading edge is?
You don't have one and will lose and it's back to your forex education until you do.
We hope you found our forex trading for beginners of use and that you will avoid them in your forex trading strategy and enjoy currency trading success.
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