Trading successfully in the Forex market is probably one of the most beneficial jobs in the world. Also, there is nothing like it. But sadly, not many operators reach that goal. And the reason why they do not reach their goals varies … Some are attracted to the Forex market for the wrong reasons (e.g. looking for easy money). Some others come to the market already with a losing mentality, so it’s only a matter of time before they empty their accounts, etc. If Forex trading rules are followed, then these mistakes can be avoided. Otherwise Forex trading is an excellent method of making money smartly.
Forex Trading Does Not Yield 100% Result:
Some beginner operators (and one experienced other) come to the market looking for the holy grail of trading: the system that hits all the signals. There is no system that hits 100% of the time. This is one of the most common trading mistakes.
Letting Losses Grow To Get Profit After Some Days:
By far the most common mistake when investing in Forex is to hold losing positions for a long time and to close winning positions very early (out of fear). Although there is a greater record of winning positions, the losers, although less, will represent a greater amount of money. The key to limit losses is to follow an operations plan that considers the risks and always use a stop loss. No one will be right all the time. The sooner you accept that having small losses is part of the day to day, the more time you must re-focus and get winning trades.
Operating Without A Plan:
Opening a position without a concrete plan is an invitation to the market to take our money. If the price moves against the position and you do not have a plan, you will not know with certainty when to cut the losses. If the price moves in our favour, we will not know when to collect the profits. Operating with a plan is perhaps the most important step that a Forex trader can perform, since it tries to eliminate the emotional part when it comes to making trading decisions.
Operating Without A Stop-Loss:
Operating without a stop loss is also a recipe for disaster. This is how a small and manageable loss can end up blowing up an entire account. Using a stop loss is a vital part of a well-crafted plan that has specific and realistic expectations based on previous analysis and research. The stop loss indicates when a certain strategy is invalidated. According to Forex trading strategy, traders shouldn’t operate without a stop-loss.
Moving A Stop-Loss:
Moving the stop loss to avoid being taken out of the position is almost the same as investing without a stop loss at all.
Successful currency traders do no overinvest. If you have opened positions on a constant basis, you are also constantly exposed to market risks. It is better to focus on finding optimal and strong opportunities, where the risk is lower and where a well-prepared plan and strategy can be applied. Having too many open positions at the same time is an indication that you probably do not have a good plan of operations and many of them are opening instinctively without control.