Forex Trading Mistakes to Avoid
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As a newbie to FX trading, you are very prone to making some crucial Forex trading mistakes that can cost you big time. If you are just getting into FX trading, or you have been doing it for a while, unsuccessfully, then you have come to the right place.
The fact of the matter is that FX trading is not easy, it takes knowledge, and lots of skill too. If you plan on making money and stop losing those trades, there are a few crucial tips that you need to follow. This is what we are here for today, to inform you of the most crucial Forex trading mistakes that newbies make, and how to avoid them too.
Biggest Forex Trading Mistakes to Avoid
Below we have a list of the 8 biggest Forex trading mistakes which you can make as a newbie. The fact of the matter is that as a beginner trader, unless you pay close attention to what we say here, you are likely to commit one or several of these Forex trading mistakes. If you make any of these mistakes, you can be sure that your trading account is going to suffer big time.
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Impatience is one of the biggest Forex trading mistakes out there, ones which far too many newbies commit. If there are no viable trading positions which you see as being profitable, there is no point in placing trades just because you want to trade. You need to be patient, you need to be calculated, and you need to only open positions that make sense. Being impatient and impulsive is the downfall of many day traders out there.
On the opposite end of the spectrum, another major mistake which many newbies make is to take no action at all. This is the opposite of impatience, but it also has to do with an inability to make a decision when one needs to be made. If there is a viable position at hand, don’t sit on your hands.
You don’t have to trade with huge lot sizes, but if there is a solid opportunity to make a profit, you should take it. Sitting on your hands and doing nothing when there is money to be made is a major mistake.
Lack of Discipline
Yet another one of the major Forex trading mistakes which all too many beginners make is to trade without a lack of discipline. You should know where your entry and exit points are to be, what your stop loss and take profit levels are, and more.
You need to have discipline, a solid and tested approach to trading. You can’t just place random trades and hope to come out on top. It’s all about being a knowledge and disciplined trader that follows a strategic approach to making profits.
Trading with Large Positions
Something you should never do as a newbie trader is to trade with huge positions or very large lot sizes. The reason for this is because as a newbie, you probably don’t have a huge trading account. If you don’t have much money to spare, you can’t trade with massive positions.
You want to engage in relatively low risk trading. Start with small lot sizes and then work your way up. As you gain more knowledge and experience, you can then start trading larger positions.
Waiving Off Stop Loss Orders
Another one of the biggest Forex trading mistakes which newbies make is to refuse to set stop loss orders or to ignore the stop loss orders that have been set. Stop loss orders are specifically designed to prevent huge losses from occurring.
They can help you save some money in the event that a trade goes the wrong way. Ignoring a stop loss order in the hopes that the trade will turn around is not recommended in the least. This is a huge error and it needs to be avoided at all costs.
Lack of Market Knowledge
Another bit time error which many newbies make is simply not knowing much or knowing anything about FX trading at all. It’s vital that you get a good education on FX trading in general. If you are knowledgeable and have a basic understanding of how currency trading works, you will be much more likely to make profits. It’s all about knowledge and training. Learning from the best is what you need to do.
Not Monitoring Positions
Yet another error which many beginner traders commit is to not monitor open positions. FX trading is all about being in the now and paying attention. There is no point in opening positions if you are not monitoring them. Open positions can fluctuate and you need to be there in case something goes wrong. If you see a trade going south, you need to be there to close it.
Not Managing Risk
Not engaging in adequate risk management is another one of those Forex trading mistakes which all too many people make. Folks, if you only have $1,000 to trade with, don’t invest $500 in a single trade. Place small trades and let those profits grow slowly. Moreover, don’t risk money that you cannot afford to lose. Never gamble with your mortgage payments and food money!
Avoiding Forex Trading Mistakes – Final Thoughts
The bottom line is that if you can avoid the above 9 Forex trading mistakes, you are on the right track to being a profitable FX trader. Sure, chances are that you will make mistakes. In fact, making mistakes in currency trading is unavoidable. It happens to the best of us.
However, with plenty of practice and discipline, you can avoid as many of these Forex trading mistakes as humanly possible.
Of course, if you want to become the FX trader possible, following Andrew’s Channel for all of his updates is recommended. Moreover, for the very best education in day trading possible, join the Income Mentor Box Day Trading Academy.