If you want to trade Forex and win the odds are against you – 95% of traders lose and only 5% succeed. If you want to win at forex trading (and the rewards are huge) then don’t make these 4 trading mistakes.
If you make any of these mistakes you will never achieve long term profitability in forex trading.
1. Predicting Market Movement
This is the one major error almost all new forex traders make and it’s a critical one.
If you try and predict then you are simply hoping or guessing and the market will destroy your equity.
Hoping or guessing is not a way to make money in any business – forex trading included!
For example, traders spot a support level and think it will hold so they buy – what they should do is:
Wait for proof that the level will hold by looking for a change in price momentum that shows prices are moving back up – this is the proof.
Check out and start using momentum indicators in your trading.
2. Using Logic That Does Not Work
Trader’s very often use methods or systems which can never work.
Here are some examples:
Day trading
Is popular but you will NEVER win.
All short term volatility is random - therefore you can’t get the odds in your favour and lose.
The Appliance of Science
Many traders think markets move with scientific accuracy and use cycles or Fibonacci numbers – they don’t work and never will, yet traders still use them.
Obviously they can’t work:
If markets moved to a scientific formula, we could all work out the price in advance and there would be no market.
Two Many Inputs
Many traders try to be too clever and have systems with huge amounts of indicators.
After all, 12 indicators must be better than 2 or 3 – Wrong!
Too many indicators, simply means the system simply breaks in real time trading and are not as robust as simple systems.
The above are just a few examples and there are many more – look them up in our other articles.
3. Poor Money Management
Most novice traders are paranoid about losing - they place stops so close their guaranteed to get stopped out.
On the other hand, when they have a profit they get so excited, they bank it early by moving their stop too quickly!
If you want to make money you have to take meaningful risks to make big rewards.
To do this you must keep your stops outside of normal volatility - if you want to hang onto the big trends, that make the big profits.
4. Lack of Confidence and Discipline
The reason most traders lack this is because they try and buy success.
They think someone can give them success for a few hundred dollars and buy an e-book or system from a vendor.
When the system starts to lose, they have no confidence in it and throw in the towel.
An important vital part of your forex education is:
Only you can give yourself success.
Most systems sold on the net are junk if they were that good the vendor would trade them himself and not bother you for small amounts of money!
You need to build your own system and know how and why it makes profits, have confidence in it and this will give you the discipline to follow it through inevitable losses in the short term and hold on for long term profitability.
Got a Question? Ask.
Ask the community a question about this article:
Frequently Asked Questions
My son purchased an RV a few years ago. He is now ...
By: Paula | 18-08-2008
my son purchased an RV a few years ago. He is now in prison and his money is depleted to make the payments. Right now his account is up to date but he is out of funds to make future payments. How do we try to salvage his credit rating? How do we return the RV?
I have heard several stories about people getting ...
By: Rhonda | 18-08-2008
I have heard several stories about people getting carts full of groceries for just pennies or even getting money back! How do they do it? My family is on a very tight budget and any advice will help. Thank you.
Sawbuck
By: Dave Glenda Wood | 18-08-2008
if a fin is 5.00, and a c note is 100.00 dollars, how much is a sawbuck?
$250,000 annual income
By: Don | 18-08-2008
How many individuals make over $250,000 per year?
Is Mobile Banking safe?
By: arllyn | 18-08-2008
Is Mobile Banking safe?
AAA capital Ventures says they can raise your ...
By: Ruben | 17-08-2008
AAA capital Ventures says they can raise your credit score no matter how bad.Are they legit
Q&A Powered by:
Latest Currency Trading Articles
Forex Trading - the Reason Most Traders Can't Accept Big Profits and Bank to Soon
By: Kelly Price | 06/10/2008
It may seem odd but traders who get trend direction right, bank their trades to early for a marginal profit, when they could have had a huge one and the reason this happens is they make fatal mistakes that are routed in their mindset...
Forex Mistakes - Why Ego Problems Cause Most Traders to Fail
By: Kelly Price | 06/10/2008
One of the biggest forex mistakes you can make is letting your ego get involved in trading. While it is not seen as a major problem it is and causes the demise of most new traders. If you want to win, understand ego problems and how to combat them...
Emerging Currencies and Forex Opportunities
By: Anthony Wayne | 06/10/2008
Forex markets are the world's largest markets trading approximately 2 billion dollars daily. With the US financial crisis looming large there has been increased interest in the FX opportunities provided by emerging currencies.
Earmarks in the Bailout Bill
By: Anthony Wayne | 06/10/2008
Wednesday evening, October 1st, the US Senate passed the revised bailout bill. The bill had many earmarks added to it. For those not familiar with the term earmarks-an earmark is a totally unrelated amendment added to a bill usually added surreptitiously.
FX Opportunities Require Education
By: Anthony Wayne | 06/10/2008
Many small investors in both Europe and the US are interested in Forex trading but have little or no understanding of how Forex markets work and how to invest.
Reasons for US Opposition to the Bailout
By: Anthony Wayne | 06/10/2008
There are many reasons politicians oppose the bailout of Wall Street and financial institutions. Some are based on ideology, and many politicians are responding to constituent opposition to the bailout.
The Dollar and US Prestige
By: Anthony Wayne | 06/10/2008
The current financial crisis will affect many aspects of the life of the average person in the foreseeable future. Investors will see shrinking portfolios, job prospects will dim, and retirement funds will dwindle.
Advanced Trading System
By: Aneliya Dimitrova | 06/10/2008
Advanced System
In this system, we use the following components:
Finance 
