Posts Tagged ‘failue’
Avoid Failure in the Forex Market
June 12th, 2009
One of the main factors attributed to new traders in the Forex market failing, is that they often do not take the time to study what compels the currency rates. Many traders make the mistake of trading once the market has calmed down and so miss out on the whole main trading movement and end up trading only the flow which follows a large price move, there is no substance in this. Others follow a losing tactic, in that they have tight stops on their trades with tiny profit targets. This method will only ever make the trader broker wealthy, not you.
A trader must remember that brokers are out to get rich too and so will advise you to use a high leverage. Using a high leverage means that there will be more spread income, this is because your actual position determines the amount of spread income and so the larger your position, the more the broker will earn. You must make sure that you are not over leveraged.
Some people will make the mistake of relying on others to make their trade decisions whilst still trying to have a hold on their trades. In the trading world, you should not rely on others unless they are in total control, otherwise trade alone. No one should make such important decisions for you, unless that person is yourself or someone you have employed. You must also give reasonable stop loss limits as this will then allow trades to develop, putting too strict a stop loss with brokers is proven to result in failure.
Gaining confidence with broker demo accounts is one thing but you must be very careful not to rely heavily on them, for when you then begin to trade for real, it may come as a shock to you that things are not as easy as they seem and trades are not consistently profitable. There are many day trading courses that can provide you with more knowledge should you need it if you are starting out on your own. Bill Poulos has had over 30 years of experience in the trading market and has set up Forex Income Engine which is one of the best and most informative trading courses I have ever seen.
Another piece of advice is to make sure that you consider the pair of currencies that you are trading; having a successful trade very much depends on you being correct about the second currency you have chosen to be part of your pair. You must also have a good trading plan; just merely wanting to succeed and become rich is not good enough. For a trading plan to be of use, you must set out your objectives and identify your edge, if you do not do this it is very likely that you will become just one of many of the new traders that lose too much and quit. You must realise that to trade equates to have stress, accept this and ensure that you do not leave a trade incorrectly.
Much of the advice provided here is reiterated in Forex Income Engine 2.0 but the trading course will provide you with a lot more information on how to go about trading efficiently and effectively, avoiding these simple errors.
A lot of people make the mistake of entering a trade where your profit target is less than 20 points, if this is the case the odds are very much against you as the spread you have paid to enter into the trade makes these tiny profits totally worthless to you. Learning how to pick the right trades becomes easier as you become more skilled but at the start, you should not be looking for the next bargain but focusing on trading in the direction that the price is going, following this advice will ensure that your rates improve. Do not be too confident or cocky as you will overcomplicate things when really everything should be kept simple as the results are proven to be excellent. There is no shame in completing a day trading course.
One of the best times to trade is around news time. As at news time the real money positions are all adjusted and because of this the price changes reflect currency flow. This is in comparison to quieter times in the market when the market is ruled by bank traders. To be successful a trader must not ignore technical conditions, in this way, you must be able to determine whether or not the Forex market is over-extended short or over-extended long. This is a key factor of near time price action, do not ignore the conditions. Emotional trading should also not play a factor, you should do everything you can do pre-plan every trade for when thoughts and ideas creep in that are random, this is when mistakes in trading happen.
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