There are three major mistakes too many newbies make as they dip their toes in the wild waters of foreign currency trading. If you are serious about succeeding in forex trading, here are three big DON’Ts.
- DON’T miss the step of trading on a demo account before using real money. Your broker should let you open a demo account where you can practice forex trading without risking real cash. You’ll find out how to place your orders, how to follow what’s going on with your trades, when to get in and out of positions, etc.
Every forex trader wins some and loses some. But in your demo account you won’t mind losing “demo” cash as it won’t hurt your bank account.
It’s hard for new traders to get their heads around the idea that they will lose money in forex, no matter how good they are. All traders have losers, and don’t believe anyone who says they don’t. The key is just to accept that, and your long term goal is to win more than you lose.
So DON’T start with real money: DO start by trading a demo account.
More Great Forex Info Here. Check it out.
- DON’T be conned into putting all your trades in the “hands” of a robot. Forex trading robots are excellent tools, and they certainly can let you trade 24/7, or while you are away from your computer for any length of time.
But there are good robots and not-so-good robots. Some will work well for you and others won’t. A robot is just software, and sometimes it will come up with bad answers. If you can’t recognize that, your trading will suffer. You need to know when the robot you are using is coming up with the right trading signals, and you’ll only do that when you have educated yourself about forex.
So DON’T let the robots do all your thinking before you know the basics of trading. DO use a robot as part of your trading business after you have gained some education and experience. Here’s some information about a robot that really does work.
- Don’t trade on emotion. Lots of unexpected things can affect currency prices, and sometimes quite dramatically. Earthquakes and floods, changes in governments, acts of terror, all these can and do affect currency prices.
It’s easy to panic when these things happen and sell prematurely. At the same time, it’s easy to be euphoric over great economic news and start buying inappropriately. Traders who let emotion get in the way of their trades do not prosper over the long term.
Making good use of technical analysis and trading charts is one way to guard against this. The charts don’t lie.
So DON’T trade on emotions or hunches. DO set your trading strategy and stick with it, regardless of world events or runs of “luck”.
Don’t be one of the would-be forex traders who falls victim to these 3 mistakes, or you won’t be long in the market.