Forex Trading Mistakes – 10 Deadly Ones That Will Slash Your Profits
If you want to learn currency trading the right way then you need to get the right forex education and avoid these common mistakes – make one or all of them and you will lose all your money…
Here are your 10 forex mistakes, in no particular order of importance:
1. Day trading or scalping
All short-term volatility is random and all forex day trading and scalping systems lose money longer term. You can’t win at it so don’t try. If you want to know why so many people claim to make money day trading, check out point 5.
2. Trade news stories or expert opinion
News stories are just that – stories and opinions and should not be traded.
All forex news is instantly discounted in price and therefore cannot be traded Furthermore, the news always reflects the opinions of the crowd and the majority always lose.
3. Try to predict forex prices
If you try to predict forex prices in advance and what they might do, you are simply hoping or guessing and you will see your forex predictions become as
accurate as your horoscope.
Trade the reality of price change only and confirm every move.
4. Using scientific methods
You will see vendors selling forex trading strategies based around such methods as Gann, Elliot Wave, and Fibonacci and they all don’t work – think about:
If forex prices were predictable with scientific accuracy, we would all know the price in advance and there would be no market.
Leave the above to the dreamers and the far-out investment crowd and concentrate on trading the odds.
5. Following a mechanical System From a Vendor
This is true in 99% of the cases.
The huge majority of forex trading systems sold on the net come with the disclaimer “simulated in hindsight” in plain English this means the vendor made the track record up. Avoid these trading systems
6. Using to Many Indicators
20 indicators are better than 2 right? Dead wrong!
If you use too many indicators in your forex trading strategy you will lose, as your system will have more elements to break.
Simple systems work best and always will so keep it simple!
7. Using indicators incorrectly
How many times have I seen traders buy dips to moving averages and execute a trading signal? I have lost count – hundreds of times but moving averages are a lagging, not a leading indicator, and should not be used in this way.
The above is the most common example but there are many more.
8. Working too hard
In many occupations the more effort you put in the more you get out – not so in forex trading, you get paid for being right with your market timing and that’s it.
Don’t make the mistake of working too hard and thinking you will win – you won’t.
Work smart and get the right forex education and forget about working hard.
9. Overleveraging
Forex brokers will give you leverage of up to 400:1 – this is way too much to be using. De leverage, so you can take more risk per trade and this leads me to the final point:
10. Placing stops too close and trailing too fast
Most forex traders because they over-leverage, have to put their stops to close and then get taken out by the market noise. They try so hard to avoid risk, they create it and guarantee they will be stopped. Most traders also trail their stops too quickly and never manage to run a profit.
The 10 mistakes above are made by most losing traders if you avoid them and get a sensible, simple, trend-following method that trades the odds, you can enjoy currency trading success and make big profits.
