There are a lot of dangerous moves that new forex live traders make. A lot of these moves are made because of the fact that the traders are new to the forex live market. Some of these moves are also made because the new traders do not take their time to learn about the forex live market. When you know about these moves you can actively work at avoiding them.
Forex Live Trading with Exotic Pairs
Most new traders look at trend trading because it seems like the easiest option. It makes sense to trade when the price is moving up and cashing out when it reaches the top. This can also lead them to certain exotic pairs which move in trends quite often. However, this is actually a very bad move for these new traders because exotic pairs are harder to trade. They are less liquid and more volatile than the major currency pairs. A slight movement in the market or a small impact new release can cause them to turn against the unaware trader. Getting information on these pairs is also harder as they are not main-stream. It is best that new traders stick to the major currency pairs because they are easier to trade and analyse.
Having a Trading Education
Before a forex trader starts trading they should learn about the market. However, this is actually something that some new traders completely ignore or complete to a very small level. Before you trade you have to know how and why the market moves. You also need to know how to determine which way the market may move, how you should trade in certain market conditions and how to limit your risk and losses.
New traders that do not complete their trading education properly will lose money on the market. They are also more likely to stop trading after a very short period of time. The only way you can circumvent this move is by taking the time to learn what you can about the market.
Trade With Leverage
It is possible to open a forex trading account with very small amounts of capital. While this opens the market up to retail traders it also causes leverage to be used more often. A lot of new traders view leverage as their way of making more money. While leverage is able to make money it also loses a lot of traders all their money. You have to be very careful when using leverage and never use amounts that risks more than 2% of your trading account.
A lot of traders are looking for the one big trade that allows them to retire and never have to worry ever again. New traders think about this because there have been traders who make one big trade that sets them up for life. However, this is actually very rare and more often than not leads to a big loss instead of a big win. Risking all your money on a single trade is more likely to cause you to lose everything. You should never risk more than 2% of your trading account on a single trade. This allows you to trade for longer if you hit a string of losses.
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