Forex Trading which is equivalent to exchange or trading the different currency pairs of the Forex market is a very big lucrative business online. A lot of people have become millionaires just from trading Forex, while a whole lot of others loose their money daily in the volatile Forex market. This is because of some major mistakes that most traders make. This article would review four of such mistakes that Forex traders make and also share an advisory solution for each of them.
Gambling Instead Of Trading : A lot of people who think they are trading Forex are actually “Gambling” rather than Forex trading. What do I mean by “gambling” ?. I mean, that is that most traders fail to recognize that Forex trading is a business and should be taken as such, rather they treat Forex trading like casino games, and by doing so, they fail to spend their time to study the Forex market, set goals, know the trend direction of the markets, and to flow with the trend. They just dabble into the market hoping that luck would be by their side, and what do they get in return, “Loss of money!”. So any serious trader should take out time to set trading goals, study the market , know the direction of the market and also follow the trend, because the “Trend is always your friend!“.
Setting Unrealistic Goals : As much as Forex trading is a very lucrative business, it is not a “Get rich over-night” business venture. Many people jump into the Forex market with unrealistic goals and expectations, like somebody hoping to turn $100 to $10,000 in a week through Forex trading has already positioned his/her to fail miserably, and when such goals are not met, they quit within a short time believing that Forex trading does not work or it is not lucrative. Always set realistic goals when making your plans. Setting up a goal of investing $10,000 capital to get a profit of $1,000 in one month’s time is very realistic and achievable.
Premature Exits in Trading : When a trader enters the market and the market is going in his favor, and suddenly, the market takes a U-turn to the opposite direction, and the trader gets out of the market immediately, it is termed “Premature Exit”. This mistake is common with new traders in the Forex market. Usually after such set backs, the market gets back to the favorable trend and the trader gets to loose out from making a lot of profit because of fear or anxiety. A little patience and monitoring are all that is required in such situations so the market can readjust itself and move into the right trend.
Trading to Earn-Back Losses With More Trades : This is a very common mistake traders make, especially after the trade has had some series of losses. They try to earn back their losses in their next trade. This is very dangerous, as it can wipe out the little profit you have left including your capital. This is also known as “The Gambling Mentality ” and should be avoided. After any series of losses, take your time, to bounce-back bit by bit.
Above I have reviewed the four common must-avoid mistakes which Forex traders usually make.
Source: Hussein Chatin
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