Top Forex trading mistakes to avoid
The Forex trading market is so big, there’s room for both experienced people and beginners who have no prior knowledge of the stock market, which makes it so great. While there is no room for unrealistic expectations here, if you start small and slowly work your way to the top, you might get Forex to become the main source of your income. One curious thing about most Forex traders is that no matter how experienced they are in the business, they tend to make the same mistakes. To help you learn how to swim with the sharks and resist the tempting but potentially dangerous offers, we asked a couple of experts for help. They gave us a list of top mistakes people make when trading, and if you want to learn from other peoples’ experience and get the best out of it, make sure you don’t follow their footsteps.
Mistake number one – too much leverage
This basically means that you have a small account balance but decide to make a big trade. It might sound like a great plan to get a large sum of money fast, but if the plan backfires, it can get you exactly the opposite and leave you broke. Even small currency fluctuations could cause you big losses, so it’s better not to trade on the margin and stop using too much leverage.
Mistake number two – wasting money on systems
From the day you start your Forex career, you’ll notice that there are tons of offers like systems that guarantee they will triple your every investment, advice on trades and other scams that will just make you give money for nothing. If there were such a thing as a system that works, don’t you think people would hear about it by now? Don’t fall for these baits and avoid anything that claims to get you a lot of money with a little effort. The only way to make it on the Forex market is to take baby steps and carefully plan your next move instead of falling for these easy money scams.
Mistake number three – trying to pick tops and bottoms
This is the most logical strategy for almost every new Forex trader which also proved to be one of the worst. The idea behind it is simple – you try to follow a currency and predict the moment it will start moving in the opposite direction, thus finding currency tops and bottoms. The currency market is so volatile, it’s tricky even for the biggest trade experts to predict tops and bottoms, so don’t waste your time trying to do the impossible.
Mistake number four – forcing over trading
Another very common mistake in new traders is over trading. Desperate to make cash, newbies will often force trading even when there aren’t any really good opportunities, instead of just waiting for the right moment to come along. This can leave you with big losses, so learn to be patient and wait for the right thing.