Enclosed are 10 mistakes novice traders make and they help over 90% of novice traders lose all their money. Make any of them in forex trading and odds are you will lose to.
Here are 10 mistakes you must avoid to win in online forex trading:
1. Day Trade
Simply the best way to lose in Forex trading.
The logic does not work.
This should be obvious to a child, let alone grown adults!
Yet, more novice traders than ever try this dumb way of trading.
We have written numerous articles on this, if you still want to day trade read them.
2. Consult a guru
There are some people who sell advice that is good, but 90% of it is not worth the money.
If you do buy advice make sure you understand the logic and can follow it with discipline.
There are very few gurus that can help you and the best way is to do it on your own.
Success comes from within.
3. Get a broker assisted account
If brokers were good at trading they would not be brokers, they would be making money for themselves.
Sure, they can give you convincing stories, but stories do not make money.
Getting market direction right does and the odds of your broker doing this are slim.
4. I can trade a Demo account so now I can make money
So you can make money paper trading with no money and place orders?
Fact is, paper trading is easy there is no pressure, as there is no money on the line.
Trading is an emotional ride and when money comes into the equation paper trader's crumble as easily as traders who have not used a demo account.
5. Trade to frequently
Many traders think if their not in the market they will miss a move.
They trade for the sake of it and do not have the odds on their side.
Only trade high odds trades, they can not be hurried.
6. Mix fundamentals and technical inputs
A great way to lose.
You are either one or the other you can not combine the two.
7. Chase your tail
Many traders constantly chop and change systems.
They have a perfectly good system that could have stayed with but get bored and swap and then they do the same with the next system.
Get a system and stick with it.
8. Over leverage
They over leverage on trades and get wiped out.
To win at online forex trading you need to play great defense, as well as great indemnity.
Protect what you have above all else.
All trades are equal, do not fall in love with a trade.
In fact, the ones that look best and are the most comfortable to trade, often turn out to be losers.
9. Avoiding risk and creating it
Traders are so obsessed with avoiding risk that they create it, by having stops to close and trailing them to quickly.
By trying to restrict risk they create it, by guaranteeing they will be stopped out and never riding a big profitable trade.
Forex trading is all about taking risk – calculated risks, when the odds are in your favor and making sure you do not get stopped out by normal market volatility.
Learn about volatility and standard deviation, if you want to know why this is so important.
10. Try and have to many inputs
Many traders look for the perfect system and the more complicated it is the more likely it is to succeed.
After all 10 indicators are better than 2.
Not so, in fact the more inputs you have the less likely the system is to succeed.
There are more elements of the system to break it.
In forex trading simple systems beat more complicated ones and most of the world's top traders only use very few inputs.
Do not try and be clever and complicated, or you will lose.
Above you have 10 common errors forex traders make.
If you make any of them your chances of losing will be increased dramatically.