Top 7 Forex trading mistakes with solutions
Do you want to make profits constantly and predictably in the forex market?
Are you tired of spending countless hours and money on the screen and not earning the value for your efforts?
Forex trading is a highly profitable
business venture, but before you enjoy the profits, you must first overcome the psychological and technical barriers.
In this blog post, you will learn the top forex trading mistakes and how to overcome them so that you start making profits from the market from tomorrow.
This are the common mistakes that hinders new traders from realizing their dreams.
1: Not reseaching extensively
Amateur traders are careless when it comes to reseaching their trades. It’s common to find them placing orders without thorough fandermendal or technical analysis.
To click on the button without thorough technical and or fundermendal analysis is like throwing your hard earned money away, you only have yourself to blame.
Their are several books that teaches about forex analysis, if you are serious enough, you should consider taking classes on trading. This will help skyrocket your profits in the market.
Most people fail because they never took the time to give their best, they never gave their ‘A’ game.
Learning about technical analysis should not take you more than a week of serious studies, you this is true for the fundermendal analysis. Given that you can access the demo account, three months of practice may be enough. Now, you spend the next three months with a real mini account and in six months you are an expert.
Researching should be part of your daily routine, don’t let yourself get used to placing orders without thorough research. This will become a second nature, a character that will be very hard to break.
The excitement of taking positions make new comers to always take a place in the market.
Slippage, taxes and spread are the common deadly animals that eats traders alife.
This challenges are more pronounced in the accounts of traders who overtrade.
Day trading is considered earned income and is taxed as such.
Slippage is the difference between the expected buying or selling price and the actual Price that you actually get into or out of the trade.
Each time that you take a position, you pay the broker an amount call the spread.
Putting together all this four factors, in the long term, they will erode your account alife.
Watch out for this mistake by reducing the number of times that you take a position in the market and you will save your coins.
3: Poor forex trading mastery
Forex trading is a Profession Just like any other serious occupation. This call for proper mastery of the content matter.
There are thousands of free e-books, podcasts, and other several tutorials that can help you learn the topic of trading.
Download free e-books from internet and start earning from tomorrow. You are an expert if you train yourself to be One. You know what? Experts are rewarded by the market while amateurs are banished severely.
Your training should be an ongoing process, you should not stop growing and learning as a trader.
Knowledge is Power and money in the world of forex trading.
The more you learn about forex trading strategies, the more like for you to develop your own sound trading strategy.
It’s not enough to operate the metatrader4 platform, it’s enough to understand exact what you are doing.
Proper knowledge of the market dynamics will go a long way to helping you curate a standard business plan.
4: Lack of a business plan
Forex trading is a business just like brick and mortar businesses.
For that reason, you should have a road Map, a business plan that directs all your undertakings.
A business plan acts as a guide and a vision for your business.
Without a business plan, psychological issues will set into your trading plan thus rendering you helpless.
With a business plan, your SWOT analysis will answer the question and solve issues that would have otherwise distracted you.
A vision and your mission statement will help you to prioritize your activities properly thus focusing your efforts on the fulcrum.
5: Too much Leveraging
Leverage is not a holly grain as far as Forex trading is concerned. Why? Because it’s a double edged sword. It can work for you as well as against you.
Taking of leverage, I advice that you really understand what effects it has on your account.
6: Excessive straining and struggle
You don’t have to strain with forex trading. This is more pronounced in the case of part time traders who hold a day job and only work during the nights.
This people tend to overwork and hence impaire there judgement thus making improper decisions.
There is a Chinese proverb that Says, if was given six hours to cut a tree, I will spend the first four sharpening the axe.
In forex trading, the actual work is not in trading but in preparing to trade.
Preparation for trading starts from learning to the process of reseaching.
The two stages should take a large part of your time and efforts but not to the extend of making real the saying that too much of anything is poisonous.
Give forex trading just enough time to make a profit and nothing more. The extra time that you are spending online trading should have been used for other businesses.
7: Inadequate confidence and courage
Most people take positions that they never wait until it’s through.
This is caused by lack of confidence and courage, you can overcome this by taking your saw Shappening skills seriously.
Most of the time, I prefer taking a position and setting stop loss and take profits orders so that I can only wait for the final results at the end of the day.
With this approach, you can avoid the temptation to change a position that you will regret later.