Currency Trading Mistakes
July 5th, 2009
If you were to take every trader in the world and seperated the ones making money consistently month to month and the ones that are loosing money you will end up with a lot of wasted money. In fact only about 10% of traders either break even or turn profit. You may ask yourself how the 10% survive in such a huge market.
There is no exact method to how they do this. There are though a few flaws that if avoided will increase an investors chance of being successful greatly. I am not claiming to have found a secret breakthrough, but rather a few ideas to help avoid currency trading mistakes.
No. 1 Trading Flaw – No Trading Method
If you want to be constant with your trades you need to have a trading method, which is just an understanding of how to look at the markets. If you plan to play the market for a while you can’t make this a guessing game. You need a method so that you know what you should buy or sell. You need to write down a plain of attack ie.. do your research.
No. 2 Trading Mistake – No Set Discipline
After you have identified and reseached your trading method, you must apply discipline to your system. Note the fatal flaw is having no discipline. If you are looking at or aproaching a trade differently from how you were in the past, then you haven’t identified your trading method or else you have no discipline on the method you have already identified. If you want to succeed and not make currency trading mistakes, there must be consistency.
No. 3 Trading Mistake – Setting Your Goals Too High
It is possible to experience above average trading results in your account. Bit this is difficult to achieve without taking the risks that are above average also. So withing your first year of becoming a trader don’t try to be over realistic and aim for 50% – 200%. Within your first year you should aim for 0%. I am not talking about losing money but more like staying within the market and educating yourself so within the second and third year you will succeed.
No. 4 Trading Mistake – Having no Patience
You must have patience. Only about 20% of the time the market is trending. So you guessed it the other 80% of the times the market isn’t going in one clear direction. Now look at it like this, there are only around three good trading opportunities at any given time frame. Meaning if you are a short-term trader you will only have around 3 very good trades a week and for long-term traders you only have around 3 very good trades per year. I understand trading can be very exciting and very often you feel like youu want to trade more or else you will be missing out on something big. Have patience and don’t worry about missed oportunities there will always be another oportunity out there.
No. 5 Trading Mistake – Manage your Finances
The last tip i can give is to manage your finances. I feel that most traders trade under funded or else withouth enough capital in their trading account to trade in the market. If you are trading with small trading accounts then trade small. Remember if you want to be consistently successful then you must realize how to survive through time. Don’t risk too much or else you can only afford a couple consecutive loosers. This flaw deserves a lot more explaning even though you just need to be logical with your trades.
Final Thought on forex trading flaws
To be successful at trading it takes a lot of hard work. If you think otherwise, then you are on the wrong track to success and it might be wise to rethink your methods. If you work hard you will be rewarded greatly. A couple good trades and you are on you way. Just try not to get caught in these currency trading mistakes.
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