Here we will look at the 4 key mistakes which novice traders make which lead to losses. Lets look at the mistakes in more detail and also give you some tips on how to enter the 5% of traders who enjoy currency trading success.
When learning to trade Forex always keep in mind 95% of traders lose but traders don't learn because they can't learn to win they can, they simply get the wrong education or have the wrong mindset.
1.Using Cheap Get Rich Quick Robots
It's surprising how many new traders use a software package they buy for a couple of hundred dollars and think they will get rich with no effort. If you really think you don't have to do any work in a market where the majority lose stay away from currency trading - these packages guarantee you will lose and think about it - if you really could make money with no effort so cheaply, everyone would be a Forex trader and no one would work.
2.Trading to Much
Most traders think the more they trade, the bigger their profits are going to be but this is not true. You only want to trade the high odds opportunities and that means you need to be patient but what do the vast majority of Forex traders do? They scalp and day trade and trade the noise of the market and end up making a lot of effort and losing.
3.Over Leverage
This is a very common error - all retail Forex brokers will give you 200:1 leverage but if you leverage up to high not only do you have huge risk, the commission impact on your account can be in double figures meaning, you need to make this amount back to just break even! You can make triple digit gains on 10 - 20:1 leverage so don't try and get rich overnight.
4.Trading the News and Trading With the Majority
All the experts you see on TV and the news wires reflect the opinion of the crowd and while the stories sound convincing the crowd always losses! One of the key traits of winners is they don't look to others for advice and they stand aside from the crowd. If you don't like to be on your own, don't trade currencies.
How to Win at Forex
Learn the basics and stay away from get rich quick software and get a simple strategy based around trading charts. If you trade with charts, you don't need to spend time looking at news, just look at high odds chart formations and trade them;you don't need to know why the prices are moving, you can just lock into trends and make money from them.
Always keep in mind, you only need a simple trading strategy (because if you make it to complex it will have to many parameters to break) and then trade the reality of price action with discipline and you can enjoy long term currency trading success.
