Every trader, at one point in their lives, will deal with these common Forex trading mistakes and traps.
If you’re reading this now, chances are that you are a victim of these mistakes and traps.
There are plenty of material out there on this subject but I want you to take these lessons for free:
Mistake 1: Falling for the trap
Have you ever opened your chart and in that instant you see a potential trade that looks like a 100% sure win?
Well, if you enter this trade right away because you think the opportunity will be gone soon, chances are that you will have entered a trap, why?
Because the market is known to trick retail traders. If it forms a trap and many traders obliviously run into it, the financial institutions make money.
If you want to know that it’s a trap, observe how the market turns against you as soon as you enter your position.
I know that at this point, some traders will exit in panic while others will try to hold on, hoping that the market will return to the direction they intended it to go.
The best way to trade Forex profitably is not to hope for the market to do what you wish it will or might do.
Before you jump into that trap, remember that you have a plan and if the trade does fails to meet any of your criteria, simply don’t go into it however tempting it might look like.
Mistake 2: Risking too much to recoup what you lost in the previous trade
This has been said many times before but it is worth putting it in a way that all of us can understand.
Remember that there is no guarantee of any given trade yielding a profit. You can lose even 5 trades in a row.
Now, think about what happens when you increase the size of your position, hoping that this trade will cater for your previous loss.
What if the eventuality is not in your favor? Do you see how you will ruin your account in a short time?
Mistake 3: Forcing your way into the market
This is a very common Forex trading mistake and a trap as well.
Over the years, I’ve come to see the market as something with a personality. It almost feels like the market has a sense. It can hear, it can see!
Sometimes you will enter a couple of trades that are perfectly okay as per your strategy but in the end, all your trades will lose money.
Are you doing something wrong or what? Not necessarily.
But maybe the market is telling you to take a break. If you experience this in any given day or week, shut down the computer and take some break for a day or two.
I have realized that this is the best way to deal with the Forex market if you believe you are just having a bad day.
Mistake 4: Deviating from your strategy after a few losing trades
In mistake 3, we discussed how to deal with a market that just won’t make you any money in any particular day.
Majority of traders out there are going to be tempted to change their strategy because they feel it has stopped working.
If you have a sound strategy like mine, then there’s absolutely no reason to start thinking of another strategy.
We believe in our strategy and we stick to our strategies. When things aren’t working, it’s not the strategy but your impatience to accept that even tomorrow there will be another opportunity to make money.
Mistake 5: Trading everyday to supposedly make more money
Another common Forex trading mistake which is also a trap is overtrading. It kills your account, man!
Those who churn and burn their accounts find themselves in this unfortunate circumstance because they believe that taking too many trades will make them more money.
Hedge funds make their money not by overtrading but from only a handful of trades gone right.
I believe that this is how retail traders should approach the market. Opportunities will not manifest on a daily basis but when one trade setup appears on your chart and it meets your criteria, then by all means take the chance.
This is the basis for only taking 2 or 3 trades in a month and still making a lot of money from those trades compared to someone who enters 30 trades in the same period of time.
This brings us to the topic of your account size.
Truth is that with everything remaining constant, you still need a bigger account size in order to make more money from a few trades.
If you are trading a small account, you will be tempted to trade more often, which is not how you should be trading.
To be a proficient trader, you need to be aware of these 5 common Forex trading mistakes and traps.
If you do as I say, then you will see great improvement in your results.
I am here to give you support but most importantly, the money is in my trading course and signals.