Tag: Forex trading mistakes

Forex Mistakes to be Avoided

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Forex Mistakes to be Avoided

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Newbies often commit a lot of Forex mistakes in trading, mistakes that can easily be avoided with the right tips. If you want to make real profits in currency trading, these Forex mistakes must be avoided at all costs.

Forex Mistakes

Forex Mistakes: Inaction

One of the major Forex mistakes which newbies often make is that of inaction. Beginners will often be overly cautious and fearful of losing trades. Yes, of course it is reasonable to be fearful of losing money. That said, people, this is currency trading and losing the occasional trade cannot be avoided by any means.

You will have to deal with occasional losses. Therefore, one of the worst things you can do is to not take action when you see a position with a big potential to be ITM or in the money. Sitting on your hands and not trading when there is a good opportunity leads to missed opportunities and missed profits.

Impatience

When it comes to Forex mistakes, on the other end of the spectrum is impatience. No, sitting on your hands and letting opportunity after opportunity slip through your fingers is not good. However, on the opposite side of the coin, impatience is also a big time Forex mistake which all too many people make. Placing a trade just so you have placed a trade should not be done.

If you see a position that does not seem reliable, then don’t place a trade on it. There’s no point in placing bad trades just so you have traded. Wait for the opportune time and strike while the iron is hot. It’s all about finding the right time to execute a trade.

 

Trading Huge Positions

Yet another one of the biggest Forex mistakes which people make is to trade with massive positions. Now, this may be totally fine if you are a knowledgeable and experience trader who has a lot of money to spare.

However, if you are just starting out in the world of currency trading, you don’t have much experience, and your cashflow is limited, then trading large amounts and big lot sizes is not recommended. If you don’t have lots of skill, then you are more likely to lose trades, and the more trades you lose, the more money you will lose. Therefore, start off small and gain lots of practice, then as your skills improve, this is when you can increase lot sizes and trading amounts.

Forex Mistakes

 

No Discipline

In terms of Forex mistakes committed by newbie traders, not having any discipline is a big one. You cannot just trade blindly without a plan. You need to know what the best entry points are, where the best exit points are, and you need to set good stop loss levels and take profit levels too.

Moreover, you also need to have a good and time tested trading strategy, something that is proven to win trades. You cannot trade blindly or emotionally. You have to be rational, diligent, and your trading needs to be based on some sort of plan.

 

Forex Mistakes: A Lack of Knowledge

Yet another one of the biggest Forex mistakes which all too many people make is to trade without knowledge. Folks, currency trading is not easy, not in the least. If you have no idea what you are doing, then you are bound to lose money. That is just the way it is.

This is not like playing blackjack where a lot is left up to chance. Sure, currency trading is a bit of a risky gamble, but it’s a type of gambling that is predictable. With the right skills and knowledge in your arsenal, you can do a whole lot to mitigate risk and to win trades.

It’s all about being aware of the basics of FX trading, what the terms are, how indicators work, and all of that other fun stuff too. Trading Forex without a decent education is like trying to be an astronaut when you can’t even name the planets in our solar system.

 

Ignoring Stop Losses

Yes, there are lots of potential Forex mistakes out there, but one of the most severe ones is not paying attention to stop loss orders. Stop loss orders are of course designed to automatically close your trades the event that they are losing money.

It’s a good way to stop you from totally losing your full investment amount in a particular trade. However, many newbie traders think that it is OK to ignore stop loss orders and to keep trades open even when stop loss levels indicate that it’s time to cut losses. This is a bad idea. If a trade is going south, it’s always better to cut your losses and start fresh.

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Not Engaging in Risk Management

Folks, never trade with more money than you can afford to lose. In terms of Forex mistakes, it’s one of the biggest ones which people commit. People will often risk way more money than they can afford, which is of course a big problem.

Sure, if you win your trades and you get lucky, you can avoid going bust. However, remember that losses are a part of FX trading, a part that is inherent. You will lose trades every now and again. Even the best FX traders out there lose trades from time to time. If you risk way more cash than you can afford, and a trade is lost, it could take only a single trade totally wipe you out.

 

Forex Mistakes: Failing to Monitor Positions

The final of the big Forex mistakes you need to avoid is failing to monitor your trading positions. Never open trades and then just let them be. You need to keep an eye on trades. In the even that a trade starts hemorrhaging money, you need to be there to close it. Always keep your eye on all open positions.

 

Forex Mistakes to Avoid – Final Thoughts

Yes, these are the biggest Forex mistakes which you need to avoid committing. That said, there is nothing better than a comprehensive trading education, which is exactly what the Income Mentor Box Day Trading Academy has to offer.

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Most Common Day Trading Mistakes

Fabian FabianLatest News / Latest News / NewsLeave a comment

Most Common Day Trading Mistakes

OFFICIAL WEBSITE: IncomeMentorBox.com

Are you a newbie trader that is just getting into the world of day trading? Yeah, it can be really exhilarating, especially when you rack up some wins and profits. However, unfortunately, the world of day trading can be a brutal and unforgiving one, and there are some common day trading mistakes which far too many people make. These are common day trading mistakes which can and should be avoided at all costs, at least if you like winning. Today, our Income Mentor Box article of the day is going to focus on 3 major day trading mistakes that you need to steer clear of.

Income Mentor Box Common Day Trading Mistakes

 

3 Most Common Day Trading Mistakes

There are a few really big day trading mistakes which many novice traders and newbies make. These are day trading mistakes that will not only cost you single trades, but will have you losing trade after trade. If you commit these day trading mistakes, you will end up burning through your investment capital faster than a forest fire burns through the hills of California during the dry season.

 

  1. Trading Against Trends

One of the most common day trading mistakes that we see newbies making time and time again is trading against trends. Folks, there is a reason why there are trends and why we as day traders observe them. It is because trading in the same direction as trends is usually quite predictable and profitable. There is a good reason why there are so many trend indicators out there, because then tend to work pretty darn well.

For the most part, trading against trends, such as executing a sell trade in an upward trend, us just unreasonable and statistically speaking, it usually just does not work out very well at all. Use your trend indicators, follow trends, and predict new trends, but don’t try and get all revolutionary and trade against trends. When it comes to common day trading mistakes, trading against ongoing trend is one of the biggest and most fatal ones out there.

  1. People Investing Way Too Much Cash In A Single Trade

Another one of the most common and fatal day trading mistakes which inexperienced traders tend to make is to invest way too much money into a single trade. To a certain extent, this also counts for a limited number of assets being invested in. Generally speaking, this is all about the principle of diversity and investment diversification.

If you invest a whole lot of cash into a single trade, and it goes south, well darn, tough luck for you, looks like you just lost all your money. For instance, if you have $3,000 in liquid cash to trade with, you should never invest more than $250 into a single trade. This way, you can place up to 12 trades with that money, and potentially win a whole lot of them. However, if you blast that whole 3K into a single trade, and it loses, well, you just burned your investment capital. Always keep some cash in reserve, don’t invest in large lot sizes, and diversify your trades.

Choose a few Forex trades, maybe some commodities, a couple of diverse stocks, and so on and so forth. When stock trading, if oil stocks all go down, if you only have oil stocks, you will lose a whole lot of money. So, invest in some oil, gold, tech, or whatever else, but just don’t invest all of your cash into the same type of asset. It’s all about diversification folks. Investing too much cash into single trades, and only investing in one asset type, is another one of those big day trading mistakes you have to avoid.

  1. Going Overboard With Margin & Leverage

Yet another one of the most common day trading mistakes which newbies, and even lots of pros make, is to go overboard with margin and leverage trading. To put it in a nutshell, leveraging trades allows you to trade with much larger cash quantities than you actually have at your disposal. For instance, if you leverage a trade by 10 to 1, it means that you only have to put up 1/10 of the money to trade with. In other words, for a 10 to 1 leverage trade, you are only investing $100 up front, but because it is 10 to 1, the trade is actually $1,000.

This lets people trade with much more cash than they actually have, and it is super dangerous. Yes, the reward can be massive, but so is the risk. This is because even though you only invest $100 up front, if the trade turns out to be a loser, you are on the hook for the full $1,000. The $100 is the margin, and 10 to 1 is the leverage, thus this is a $1,000 trade. It can be great if you win, but so much worse if you use, especially if you are trading beyond your means. In terms of day trading mistakes, this is one of the mistakes which puts a whole lot of good folks out of business.

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3 Day Trading Mistakes – Final Thoughts

The bottom line is that the 2 big day trading mistakes which we listed above are fatal ones that you need to avoid at all cost. To learn more about becoming a pro day trader, you should absolutely check out what our Income Mentor Box Day Trading Academy has to offer you.