The 5 Top Mistakes Made By Forex Traders
An acceptable part of Forex trading is that you will make mistakes when trading the Forex markets
. This is inevitable even for the most seasoned of Forex traders. Acknowledging your errors and mistakes and learning from them is a key point in establishing yourself as a successful Forex trader.
Here are five of the most common trading mistakes made by Forex traders. Remember these points when you are trading to try to avoid these common trading mistakes!
1. Trading against the major trend Traders will sometimes trade against the major market trend and the current momentum of the market. Trading in the direction of the major trend means that you have the backing of market momentum. Only ever trade in the opposite direction to the main trend if you have conclusive evidence that it is ending.
2. Closing winning trades too early Pullbacks do occur within every market but provided your fundamental and technical reasons for entering the trade are still present, then back your conviction. It is always possible to lighten up on the position, take some profits or even move a stop to break even.
3. Holding onto losing positions for too long a time -. If you have called it wrong then admit it, take your loss and move on. Holding a position in the hope that it will turn around will most often contribute to further losses on your account. Measure your risk before you enter any trade and be prepared to limit your loss if you get it wrong.
4. Trading beyond your means - It doesn't matter what size of account you start with you need to learn to balance your trading risks. This means that you should stick with a set risk level per trade and diversify your trades. Avoid risking everything on the outcome of one trade, no matter how good it may look. Also accept that even with a winning strategy you will need time for the big profits to come. Do not be too keen and expect your trading account to get there too quickly.
5. Trading Excessively - If you trade too frequently then much of your profit will end up in the hands of Forex brokers from the cost of transactions. Also balance your trading within the rest of your life. By balancing your trading with the rest of your life can actually help to improve your trading results.
An important trait is to look back critically at both your trading approach and your own actions. If you can see obvious problems with your approach to trading then seek to correct these mistakes to help prevent them from happening again in the future.
Critically view your trading approach as this can very often improve your Forex performance more than by simply jumping on board the latest strategy or system. Also make sure you embark on some propor Forex education. Remember that whatever strategy you follow, if you take the same mistakes with you, you will struggle to succeed with your Forex trading!
by: Leo Forex
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