Foreign Currency Exchange Trading can be one of the most prosperous investments any individual can make. There are many advantages of trading Forex… it is a 24/7 market, most of the trading is mechanical, you can use a big amount of leverage to raise your potential revenue, and much more.
Regardless, there are frequent errors that seem to be made by every starter Forex trader and sometimes even the professionals.
You might ask yourself, how can I prevent these mishaps and how do I recognize them? Well, I am trying to do something different with this article, I am going to explain to you one mistake and then a answer, then another mistake and another solution and so on.
Over Trading:
I ‘m sure a lot of us have listened about this one, but if you haven’t please allow me to explain. Over trading happens whenever a foreign currency exchange trader is looking for trading opportunities that aren’t really there. I have heard it all, “But if I trade more I will make more quicker”, “If this trading strategy works it will make money even if I trade it on 15 pairs”, “trading several pairs doesn’t involve money management”... I could keep going for hours.
The truth: over-trading is the MAIN cause why a good number of traders lose money. Trading the forex market can be difficult and it is easy to get confused by the enormous amount of information that is available via the internet (the problem is that most of this information is fallacious!).
The Fix: The best way to become a lucrative foreign exchange trader and not over-trade is to have a trading plan; every single successful trader I have met has one. Having a trading plan can help you become a way more disciplined trader and of course a a lot more profitable one. This takes me to the next common mistake.
Not having a trading plan: I have been trading and generating Forex strategies with some of the best and most successful foreign exchange traders in the USA and throughout the world, and I have NEVER met any successful trader without a trading plan or that just trades what looks good.
As an example, when a person wants to get a loan from a bank to launch a business one of the most valuable documents that the bank will ask for is a business plan. Why? They don’t want to lend money to anybody who doesn’t have a clear plan of what to do with it. The same happens in currency exchange.
You can be a highly talented trader and have the best tools and resources but if you don’t have a trading plan you won’t be able to put it all together. Get it?
Picking tops and buttons:
Numerous new traders try to pinpoint and identify where a currency pair will turn around and go the opposite direction, this is a giant mistake. Picking tops and buttons is a pretty tricky task and even when it is done the right way you might still get an generic result.
The best technique to not commit this mistake is to stick to your trading plan and trading strategy. Hot tip: if your trading strategy is based on reversals (tops and buttons) make sure that you demo trade for at least 2 months before you send your hard earned money to your broker.
Making decisions based on emotions:
Emotions control, or at least manipulate everything we do and think, but unfortunately being emotional in Forex can very pricey.
Foreign currency exchange trading is a quite competitive arena and when you trade the currency market you are trading against some of the smartest minds on the planet, this is why you need to stay concentrated and not let your emotions control your trading decisions. Hot Tip: use automated software to allow you to get your entry and exit points and to take the trades for you, this will help you to keep emotions out of the picture.
Not using money management: money management plays a quite vital role in foreign currency exchange trading. Not using any money management in your trading is like going to war with no weapons. The most effective way to incorporate MM (money management) in your foreign currency trading is to create a set of rules that you are going to stick to when you trade.
As an example, you can make a choice to not trade more than 2% in any given trade or to not trade more than 5% of your total capital every day.
Currency Trading can become a pretty gratifying activity ( and that is bringing tremendous monetary rewards) or it might even become your Full time job. You are the only one that can take action, get educated, and start to trade Forex the right way.
I hope I was able to provide you with helpful information that you can apply to your foreign currency exchange trading today. Stick around for much more.
Monday, June 27, 2011
Sunday, June 26, 2011
Forex Strategy Trading Helpful Hints: How to Employ Forex News to Trade the FX Markets
Fundamental analysis is the investigation of how the International events and news affect the currency markets.
In this edition of my Forex strategy trading Tricks I will be teaching you how I you can use fundamental indicators to help you take better trading conclusions.
The use of fundamental analysis in the Forex is done by utilizing economic indicators. These fundamental indicators provide you with economical aspects of a country that can enable you to assess the robustness of a country’s currency.
In this edition of my Forex strategy trading Tricks I will be teaching you how I you can use fundamental indicators to help you take better trading conclusions.
The use of fundamental analysis in the Forex is done by utilizing economic indicators. These fundamental indicators provide you with economical aspects of a country that can enable you to assess the robustness of a country’s currency.
Thursday, June 23, 2011
Forex Strategy Trading suggestions: Learn The nuts and bolts Of fx trading
Forex strategy trading is an amazingly lucrative investment to be involved in. It is the exchange of foreign commodities worldwide sold for a profit depending on what the market is investing with and the size of the lot.
Trading the Forex is not like the stock market where they are ruled by the SEC. In Forex most of the trading is done through online trading platforms and a network of banking brokers.
A great portion of the wealth that is exchanges comes from only five percent of the market banks and large corporations.
Trading the Forex is not like the stock market where they are ruled by the SEC. In Forex most of the trading is done through online trading platforms and a network of banking brokers.
A great portion of the wealth that is exchanges comes from only five percent of the market banks and large corporations.
Tuesday, June 21, 2011
Forex Professional System Trading Tips: 5 Reasons Why You Should Never Chase a Trade
As a FX trader I am learning new things all the time and I greatly enjoy to share them with my subscribers and visitors.
Today I missed a trade and I was extremely tempted to chase, however; I sticked to my trading plan and let it go.
Despite the fact that I was being tempted by the Forex trading “devil” I realized 5 things that make me stop and not chase this trade. I hope you find these Forex professional system trading points useful and enriching.
You will be subject to the psychological manipulation of the market:
When you chase a trade you do it because you are hoping to still earn money. Furthermore, you will be under a lot of pressure for several reasons.
First, you are working against the clock and the longer you wait to take the trade, the lower the probability of success the trade will have.
Second, as a Forex trader you know that by chasing a trade you are being irresponsible and you are not following your trading plan, this will afflict you incredibly.
Your money management will be out of balance:
Money management and risk management are purely the two most essential parts of currency trading. When you chase a trade you will need to change your stop loss, risked percentage, and even your entry and exit points.
Changing all these details in a matter of a few seconds to a few minutes can be really hard and you are more inclined to commit mistakes.
Your trading strategy is not effective anymore:
As a strategy developer I have invented and created more than a few trading strategies from scratch. The laws behind a successful trading system are very specific and small changes will affect the final results of the system.
Your trades have lower chances of success:
A trading strategy is based on a exact set of trading signals and market methods and when your system provides you with a signal, the signal is time sensitive.
Because of this, chasing a trade will lower your chances to earn money since your system’s signals will be out of date.
Your whole trading discipline will be compromised:
The instant you decide to not follow your trading plan and chase a trade that you missed, you are being undisciplined. Undisciplined trading is the root of most losing trades.
Discipline is required to experience great success as a trader since the markets will provide you with plenty of opportunities to be undisciplined. As an instance, you could listen to a trading analyst who is telling you to go short but your system is telling to go long, what are you going to do? .
Also, you could decide to take an impulsive trade because you “feel” like the GBPJPY is going down. What would you do in this case?
The bottom line is that taking any trading decisions that are not in your trading plan is considered a lack of discipline and they ordinarily lead to losses.
The finest traders take Forex professional system trading seriously and don’t fool around when it comes to following their trading plan.
A profitable currency trader uses a money-making trading strategy and a well written trading plan to capture consistent profits from the markets.
Stay tuned to learn more and more ways to increase your profits and reduce your risk.
Today I missed a trade and I was extremely tempted to chase, however; I sticked to my trading plan and let it go.
Despite the fact that I was being tempted by the Forex trading “devil” I realized 5 things that make me stop and not chase this trade. I hope you find these Forex professional system trading points useful and enriching.
You will be subject to the psychological manipulation of the market:
When you chase a trade you do it because you are hoping to still earn money. Furthermore, you will be under a lot of pressure for several reasons.
First, you are working against the clock and the longer you wait to take the trade, the lower the probability of success the trade will have.
Second, as a Forex trader you know that by chasing a trade you are being irresponsible and you are not following your trading plan, this will afflict you incredibly.
Your money management will be out of balance:
Money management and risk management are purely the two most essential parts of currency trading. When you chase a trade you will need to change your stop loss, risked percentage, and even your entry and exit points.
Changing all these details in a matter of a few seconds to a few minutes can be really hard and you are more inclined to commit mistakes.
Your trading strategy is not effective anymore:
As a strategy developer I have invented and created more than a few trading strategies from scratch. The laws behind a successful trading system are very specific and small changes will affect the final results of the system.
Your trades have lower chances of success:
A trading strategy is based on a exact set of trading signals and market methods and when your system provides you with a signal, the signal is time sensitive.
Because of this, chasing a trade will lower your chances to earn money since your system’s signals will be out of date.
Your whole trading discipline will be compromised:
The instant you decide to not follow your trading plan and chase a trade that you missed, you are being undisciplined. Undisciplined trading is the root of most losing trades.
Discipline is required to experience great success as a trader since the markets will provide you with plenty of opportunities to be undisciplined. As an instance, you could listen to a trading analyst who is telling you to go short but your system is telling to go long, what are you going to do? .
Also, you could decide to take an impulsive trade because you “feel” like the GBPJPY is going down. What would you do in this case?
The bottom line is that taking any trading decisions that are not in your trading plan is considered a lack of discipline and they ordinarily lead to losses.
The finest traders take Forex professional system trading seriously and don’t fool around when it comes to following their trading plan.
A profitable currency trader uses a money-making trading strategy and a well written trading plan to capture consistent profits from the markets.
Stay tuned to learn more and more ways to increase your profits and reduce your risk.
Wednesday, June 15, 2011
Foreign Currency Exchange Trading Tips: How to Establish a Successful Trading Plan Using these 7 Straightforward Tips
Building a trading plan is an important part of having a successful trading career. It is extraordinary the amount of traders that don’t use a trading plan and still wonder why they are not making profits.
In this edition of my foreign currency exchange trading tips I will be describing how to write a trading plan that will enable you to trade efficiently and grow your capital month after month.
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