5 Common Forex Trading Mistakes
Forex trading can be a useful and exciting challenge, but it can also be frustrating if you are not careful. Whether you are new to the Forex trade or a seasonal bypass, avoiding these trading mistakes can help you keep track of trading.1. Do not do your homework
Currency pairs are closely linked to national economies and are influenced by many factors. It also trades around 24/5 which means usually something happens that will move the markets.Be sure to do your homework before taking office. Not only should you be aware of upcoming events that may affect your trading, but you should also anticipate how these events may lead to market fluctuations. Be aware of what the technical indicators tell you and how you compare them with the analysis of major events.
2. Take more risks than you can
One of the most common mistakes new marketers make is misunderstanding how leverage works. Learn more about margin and leverage so you don't accidentally misuse more capital than you planned.Many traders find it helpful to set a maximum percentage of the capital they want to take risk at the same time, typically 1% to 3%. For example, if you hold $ 50,000 worth of stocks and are willing to risk a maximum of 2%, you will not be tying more than $ 1000 at the same time. It is important that you keep to this maximum once.
3. Trading offline
You can't see the forex market 24/7. Stop and Restrict orders help you enter and exit the market at pre-set prices. Not only does this allow the trading platform to execute trades when they are unavailable, it also considers completing your trades and setting exit strategies before you already trade and feel your best. Random orders do not necessarily reduce the risk of loss.
4. Exaggeration
Loss never feels right. It can make you emotional and irrational, tempting to do knee-jerk monitoring transactions that are outside your trading plan.No trader trades great every time. Accept that losses are part of the reality of trading and stick to your plan. In the long run, a trading plan should offset this loss; if not, review your plan and adjust it.