Description: Here is a look at certain things you must do if you are serious about becoming a profitable foreign exchange rates trader.
With the hype surrounding exchange rates trading lately, it is common for new traders to get lost in excitement, and this is often the reason why many fail in the long run. As a newbie to this market, there are certain mistakes you must avoid at all costs if you are serious about making your business sustainable. What are these mistakes?
Mistakes to avoid in foreign exchange rates trading
Excessive risk exposure
Many people come into this market with the misconception that it is a get rich quick scheme and thus they throw away all forms of discipline and begin to gamble their way around the market; hoping that they will hit it big soon. For a start, you must make sure that whatever amount you are coming into this market with, is one that is entirely risk free. If you invest funds meant for something else into this market, there is a 99% chance that you will blow your account in just a few days of trading. Many traders that come into this market with this get rich quick mentality are also those that will enter a trade with the maximum lot size allowed on their account and then start praying that things work out for them!
Lack of proper understanding of their trading platform
Many new foreign exchange rates traders make this mistake. They are so eager to make money that they do not take enough time to understand the trading platform they are using. This leads them into entering a buy order when they are supposed to enter a sell and a sell order when they are supposed to enter a buy. Apart from this, they also do not know how to enter a pending order with the appropriate stop loss or take profit amount. To avoid this mistake, take out as much time as you can to study your trading platform on a demo version to avoid losing money due to a click of the wrong button.
Trying to get back at the market for every single lost trade
If you are yet to come to terms with the fact that losing a single trade is not be a big deal, you will never build a stable foreign exchange rates trading career. It is virtually impossible for a trading system to work 100% of the time. So your focus should be on the bigger picture. How much do you have in your account at the end of a trading month after strictly following your trading strategy? That should be your focus as a trader.
Ignoring money management
Many good traders will tell you that if you are looking for the Holy Grail in foreign exchange rates trading, all you need is good money management. If your trading style will blow your account after 5 or 6 losing trades, you are clearly not ready to grow in this business!
If you avoid these common foreign exchange rates trading mistakes, your chances of success increase exponentially!
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