Common Forex Trading Mistakes to Avoid If you consider yourself to be an apprentice forex trader and you know for a fact that the experience you’ve got is great, then the tips, tricks and advice written in this article are exactly what you need. Being a successful Forex trader is a blessing and a curse and it’s not that common, but it’s definitely possible. What we’ll shed light on in this article are the common mistakes of traders that, if you avoid them, you will make another important step to improve your career as a Forex trader.
Random decision-making Traders should know where they plan to open and close their position before entering any market, based on a specific system they are following. Setting this ahead of time helps traders concentrate on their system and avoid second-guessing their decisions. It can also diminish losses by having stop-loss orders in place. It’s important to keep in mind that the market may not always decide where you place an order.
Trading on emotion Keeping your calm and retaining a balanced state of mind is crucial when trading in order to remain focused on important events. It’s rather an easy thing to say but very tough to do especially in the heat of the moment when you have to make a split instant decision. Beginner traders tend to trade with their emotions and they fail to recall all the things that they’ve learned.
Lack of discipline Well-organized traders who stick with a verified trading plan consistently will, more often than not, profit over those who trade inconsistently because continuous second-guessing ruins the productivity and removes the benefits of having a trading plan in the first position.
Not knowing your actual market A common mistake made by beginner Forex traders is to start trading without having sufficient knowledge of their chosen currency pair(s) and how currencies are influenced by global events.
Not monitoring your trading positions It is essential that you monitor any experience you have in the forex market. Having a close eye on how your trade is doing will help you keep control of your trade and help you follow the market movements as they happen. Staying up to date with market growths is a good way to maintain and increase your level of knowledge and good understanding of the Forex market. Be conscious that the forex market trades 24 hours a day, so making good use of pending orders will be important if you want to leave your workstation.
Trading without a good strategy A significant amount of time should be spent on determining your strategy before you place your first trade as this will make it easier for you to focus on market events. Most beginner Forex traders begin trading without having adequate knowledge of their chosen currency pairs, how currencies are influenced by global events and how they plan to benefit from price actions. It is vital that you observe the market price action and try to find trading patterns before exposing your capital, with your observations helping you formulate a rigid trading plan and a good trading style.