The Biggest Mistakes That Forex Traders Make
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Many forex traders keep making the same mistakes over and over again. One of the biggest mistakes is overtrading. When you only take the very best opportunities and are patient, trading forex can be simple and easy. However, when you just have to be in a trade all the time - it's logical that the quality of the setups will decline.
If you have a problem with overtrading ask yourself why are you trading in the first place. Are you trading for excitement, or to make money? Yes, trading can be very exciting - but most professionals will tell you that it's boring. Just like a brick layer who does the same thing day after day, professional traders wait patiently for quality setups and then take them - over and over again.
Another huge mistake that forex traders make is using inconsistent money management. If you are betting 2% on one trade and then after it loses you bet 4%, you might be in the same category as your average gambler at the casino. Be honest and evaluate your behaviour, it's easy to justify decisions in the moment but it's hard to watch your trading account dissapear before your eyes.
One more mistake that I used to make was jumping from system to system. It's very helpful to explore the various options that are out there, however if you don't become a master of one - you can't become a successful trader. If you are changing your strategy every week then you are a victim of over-optimization. You might spend years looking for the "perfect system" and never find it.
Remember that over 95% of new traders lose a lot of money and give up within 2 years. If this is happening to you then it's time to decide whether you're serious about success and then commit yourself to becoming a professional. |
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Author Resource:-
Jarratt Davis runs a live FX Trading room where he shares his expertise as former manager of a hedge fund.
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By :
Alex Harper
Submitted
2011-06-25 10:50:35 |
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