Let`s review the 7 sins of forex trading and how can you avoid them.
1. Trading without Stops and Taking Profits
Most forex traders suggest using a mental stop loss. But who have actually followed that stop loss? When price reaches it, you close out or you hope that it will reverse in your favour?
Do not trade without a hard stop loss.
2. Mastering Money Management
– Most traders tend to trade with even bigger stop loss than target revenue goal. You should aim to win more than half of your trades and you will still earn money. The trick is to find a strategy, system and signals that will work.
3. Trading Before, After and During Major News Event
– There is a high liquidity around the news events. Though you can be lucky and make a few hundred pips, often you will find yourself on the wrong side of the trade which is called margin.
I recommend learning not to trade 30 minutes before or after a news event. It is the safest way of protecting your finances.
4. Trading The Weekend
Have you ever performed trades on Fridays? If yes, then you might know what is to be stuck in a position over the weekend. Then, on Sunday, when the market is open again, have you noticed the trade became risky and it caused you big losses. So, I recommend avoiding to perform trades on Friday.
If you are a day trader, make sure that you closed all positions before the market is closed on Friday.
5. Listening to Daily Broker Commentary
– The main intention of the broker is to give advice when pushing their own positions. It means that they will trade the opposite of the news they gave just to take your liquidity or they will add more people.
My Tip: Have a realistic view on broker tips. Many will not be of a great use to you. Actually, the will just decrease the chances for successful trades.
6. Downplaying your emotions
– Many traders trade on demo accounts and do not know how it feels trading with real money. And when they try trading with their own hard earned money, they have the same mindset as if they traded on a demo account. But most of them get overwhelmed with their emotions and it results in many losses.
7. Spending a large investment on a forex mentor
You do not need to spend so much money on initial investment into hiring a qualified mentor even if he is a really good mentor.
So, I hope will help you to avoid seven deadly sins in forex trading and you will become a successful forex trader soon.
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It is obligatory to read unbiased reviews to answer a question “is forex a scam?” before you invest money into trading activity. This is important, don’t forget that we live in the world where information quickly enhances the quality of our life.
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