10 Mistakes in Forex Trading Basics


Oct 21, 2014
1. Having rich quick mentality

Beginner Forex traders often seen as a simple way to get rich in a short time, without really considering the risk and effort that must be included to achieve that goal. Trade is very large in proportion to the balance on your account in an attempt to make big profits are not likely to succeed in the long run because of the many current direction will be opposite to prediksiAnda market, which can cause severe losses.

2. Decision making random

A trader must know on what conditions they intend to open and close their positions before entering any market, based on all that they follow a certain system. Required a clear trading plan to help traders focus on their system and eliminate random guessing way. Installing stop lossjuga order to reduce losses. It's important to remember that the market may not always searahdengan your trading direction.

3. Using leverage is too high

One aspect of the Forex market is attractive to many traders an opportunity to trade melakukanmargin, in other words, trade leverage. With this facility, trading with an initial deposit kecilakan allows you to open a trading position which is relatively large, so it is important not to overdo it when choosing the size of the trading. Forex is usually traded at a high level of leverage, which means that you need investment capital equivalent to only 1% or less than the nominal amount of the actual investment. This results in a great leverage and can generate significant profits for you, but can also result in significant losses to you. It's possible your losses will be equivalent with most or all of your initial investment. We have a risk management system designed to help prevent large losses, although these measures still require a responsible approach to trade.

4. Do not use a stop loss

Many novice traders maintain the position of loss (loss) for too long, because they think too long, or hoping the market would turn in the direction of their trading. They also tend to be out of position profit (profit) is too fast to lock in immediate profits, which eliminates the opportunity to earn greater profits. While it is tempting to have this frame of mind, you must have the patience to only make trades in a position that you think are appropriate and follow up with discipline in your trading to cut losses (closes trading at a loss) quickly, or let the profit position open longer on current market movements in accordance with your expectations to generate maximum profits.

5. affected emotion

Stay calm and maintain a balance of mind is very important when you are trading, in order to stay focused on the movement of the market. It is important to always remember that your actions will affect the outcome of your trading. It is quite easy to say but very difficult to do especially when you are affected emotionally and have to make decisions in a split second. Novice traders tend to trade with their emotions and then forget all the things they learned.

6. There is no discipline

Traders who have the discipline to keep trading with a proven trading plan consistently will result in the possibility of greater profits than those trading inconsistently, guessing kemungkinanprofitabilitas, and tidakmemiliki clear trading plan. It's important to plan your trade and trade according to plan, rather than randomly selecting entered dankeluar of trade without the use of a particular trading system. Another important thing is to maintain the consistency of your trading system and follow it up with a good analysis, so you will have ideas better than trading experience and the mistakes you make.

7. Do not have the funds management

The main difference between newbies and experienced traders is their approach to financial management. Professional traders recommend to risk a certain percentage of capital and never change the percentage. Risking a percentage of the amount of your capital on each trade is very important because it reduces the impact when losses occur repeatedly in a row. Trader beginners often ignore this and increase the number of trading them when they begin to experience a loss.

8. Do not know your market

A common mistake made by novice Forex trader is to start trading without sufficient knowledge of the currency pair they choose and how currencies are affected by global events. Learn as much as possible about how the different financial markets affect each other and how they relate to each other, ie stocks, bonds, commodities and Forex. This knowledge will allow you to make better trading decisions when information from a variety of economic data released. It is also important to identify the type of the prevailing market that allows you to adjust the strategy Andadan thereby avoiding the potential loss of your trading. The more informed you are, the better your chances for a successful trading. Be aware that some market participants have different intentions than you have, for example, hedgers will sell into a rising market for hedgers often looking for the average price of a good with a great deal to manage the risk of their portfolios. This is different from the individual traders who seek to maximize profits on each trade.

9. Not monitor your position

It's important to monitor bagiAnda investment you have in the Forex market intensively. Monitoring investment will help you maintain control of your trading and help you to follow the market movements yangterjadi. Stay connected with the latest market developments is a good way to maintain and expand the level of knowledge and understanding of the Forex market. Be aware that the Forex market is a market with trade transactions 24 hours a day, so take advantage of the pending order will be very important if you want to leave your computer.

10. Trading without a strategy

A number of significant period of time should be spent on deciding your strategy before you make your first trade as this will make you easier to concentrate on market events. Most novice Forex traders start trading without having sufficient knowledge of the currency pair they choose, how currencies are affected by global events and how they plan to take advantage of price movements. It is essential that you observe the movement of the market price and try to identify patterns of trading before investing your capital. The results of your observations will help you formulate a plan tradingdan trading style.

Your trading strategy should include the following:

Planned frequency trading
The period of time during the day to open the transaction
Technical indicators to be used
Signals to buy / sell to be used
Estimates of risk and reward (risk reward ratio) for each transaction
Limit the number of daily stops to protect your capital base

Your motivation is a key aspect of successful trading because traders are not too focused to think of the potential gain or loss in the future as a result of their decisions in the present. More experienced traders focus on trading process rather than worrying about the amount of gain or loss that they may experience in trading.

Translated from : www.fandelafx.co