Forex Trading For Novices - 10 Common Mistakes You Must Avoid
Written by OnlineLoan on 00:00Forex Trading For Novices - 10 Common Mistakes You Must Avoid
By: Kelly Price
Here we will give you 10 common mistakes novice traders make. If you make any of them you will lose. Let's take a look at them...
These mistakes are in no particular order of importance, there all important and you must avoid them if you want to enjoy success.
1. Using a Forex Robot
Anyone who believes they can buy an income for life and make no effort, for a couple of hundred dollars, probably deserves to lose. These get rich quick trading systems all lose.
2. Forex day trading or scalping methods
All short term volatility in daily time frames is random, so you can't get the odds on your side when trading and if you can't trade the odds you will lose and that's a fact.
3. Believing markets can be predicted
Markets cannot be predicted and that's obvious! If there was a theory that could predict prices in advance, we would all know the price ahead of time and there would be no market. To win, you need to trade the reality of price change and don't predict.
4. Thinking hard work will bring success
It's not a nine to five job and you don't get rewarded for effort, just being right. This means you are judged on the accuracy of your trading signals and that's it. They can take 10 hours or 10 minutes, results are all that count. Work smart, not hard.
5. Thinking being clever is an advantage
Forex trading is simple and simple systems work best. If you try and be clever and complicate your trading system, you will lose.
6. Thinking you wont get a long period of drawdown
Most traders think losses happen to other traders and not them but all traders even the best. You will have to ride out long periods of losses, keep them small and trade with discipline, until you hit a home run. Most traders can't do this and if you can't trade a system with discipline, you don't have one!
7. Thinking you can trade breaking news stories
Markets move to how investors perceive the news, not the news itself. This is why markets collapse when the news is most bullish and rally when it's most bearish. Trading breaking news is a mugs game, don't try it.
8. Not understanding standard Deviation of Price
Don't know what it is? You should, because if you don't, you will not understand how volatility affects price and end up losing.
9. Thinking risk reward is target - stop
Many traders think they are trading with high reward and low risk, as they calculate profit potential, as their target minus their stop. They don't stop to think, that this is just an opinion and doesn't take into account the probability f the outcome.
10. Not knowing what a trading edge is
To win you must have an edge, know what it is and have the confidence to apply it with discipline. Your trading edge is the reason you are going to win, when 95% of traders lose. Don't know what your edge is? You don't have one, so continue your Forex education until you do.
How to Win at Forex
To win at Forex you need a simple trading system, you understand, have confidence in that you can trade with discipline. Your system should trade the odds and not predict, be based on trend following and implemented with robust money management.
TO win at Forex is a combination of both method and the correct mindset to apply it and always remember the market doesn't beat the trader the trader beats himself. You can enjoy currency trading success if you want to and hopefully, this article has pointed you in the direction of becoming a successful trader.
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