Monday 10 June 2019

7 Forex Trading Mistakes Every Beginner Traders Should Avoid

Rid yourself of the misconception that the Forex trading professionals get everything right, they don't. Forex trading is an incredibly volatile field and even the most knowledgeable of traders fall prey to the erratic markets. All the trading experience in the world won't equip you enough to manage a slipping trade. As Forex traders, they will have to learn from the mistakes their peers make. Succeeding at currency trading is mostly trial and error, and improving on your techniques once they hit a roadblock. Don't think of mistakes as a sign of inadequacy, they are but stepping stones to help you evolve into better traders.
 
Here are 7 common Forex trading mistakes several professionals make:
 
Common Forex Trading Mistakes by Beginners
Common Forex Trading Mistakes by Beginners
 
1) Trading Without Enough Knowledge: One of the most basic mistakes a trader can make is entering the markets without knowing enough. As a beginner, it is enough to know the basics about the next trade you're making. But down the line, everything from currency viability to economic stability has to be studied before making a trade! Out of excitement, several newbie Forex traders rush to the trade, without enough knowledge. Always keep your beginnings small.
 
Get a Forex demo account and learn all you can on it before taking to the real-time trade markets. On a demo platform, you'll be able to learn how to trade without risking a single dime! And with this knowledge, trading currencies will be several times easier and far less risky than it would be if you tried it without practice. 
 
2) Lack Of Proper Market Analysis: Analyzing the Forex trading markets makes up for over 70% of a trader's job! And poor analysis is the main reason behind the losses of several novices incur. Due to inexperience and the absence of good brokerage, traders fail to read the markets right. Starting off, it might be difficult going through various market nuances and studying its different shades. But with the backing of a knowledgeable Forex broker, you will be able to keep the markets on the tip of your fingers!
 
3) Holding A Lost Trade: Once a trade has crossed a certain loss threshold, it is beyond redemption. And yet some traders hold on to it hoping it will turn back in their favor! While wishful thinking is something all Forex traders do, after a particular point, things have to be approached more rationally. While you might stand a good chance of profiting from a bad trade turned good, you can't bank on bleak chances! On many occasion, several trades have led to big losses despite the placement of a proper stop-loss order. Some slippages can't be contained, just like how some trades won't come back!
 
4) Trading Without Well-Placed Stops: Stop orders are a trader's best friend. With a Forex trading stop-loss in place, you can trade brave without a single fear! What a stop does is essentially pull you out of a trade whenever you lose some money; the loss threshold is decided by you. By doing so, the stop order ensures you don't suffer huge losses, only affordable ones. While some losses do get past, stops are effective on most occasions. It is very important to place these rights; when a stop is too early or too late, you can't expect the same result!
 
5) Getting Overly Greedy: Greed is good up to a point in Forex trading; greed gets you to take risks that bring in hefty profits. But after a certain stage, greed becomes toxic and will make your trade rashly, ignoring all the red flags! Greed begets no good. Several professionals suggest traders to find contentment in their winnings because getting greedy will often lead to losing all the profits earned!
 
6) Employing Too Many Indicators: Indicators to a great job at helping you identify trends right and bag wins. But having 10 indicators crowding your charts doesn't increase your chances of success! As an adept Forex trader, you ought to pick a handful of indicators that synergize with each other and employ them only as needed. An indicator in itself is nothing, only when used right will it be effective.
 
7) Poor Risk Management: When you take the leap and risk things, you have a chance of seeing bigger profits. Let's say you leverage 500:1 on a trade, the profits you might make are 500 times the normal amount. But the same trade if lost will leave you incurring 500 times the losses! This is why it's important to manage your risks effectively.
 
Make mistakes, but ensure you learn from them because some mistakes in Forex can get scarily expensive! Before you trade on live markets, get yourself a Forex demo account from WesternFX today. With a stellar demo platform to learn on and the expert guidance of our professionals, you will be able to attain a firm grasp over Forex swiftly! Join the ranks of pro Forex traders; call us today to get started.