Forex traders make mistakes.
Some more than others. But I decided to highlight 3 Forex mistakes today which will keep you back. And stop you from making Money trading the Forex markets.I've made all of these mistakes before so I'm not judging you. I'm trying to help. I'm not a super hero trader who is above mistakes, they can happen to anyone at anytime. Just be careful when you're trading because mistakes can be costly.
I teach traders to make money trading the Forex markets and people email me with loads of different issues (find out what I'm calling the #1 Forex mistake right now here) so I know what gets traders time and time again. So let's jump into the list.
1 - Adding To Losing Positions
Traders often fall short in this category and I feel like saying I don't know why. I'd be lying if I said that because I know exactly what gets us into this position. It's the desire deep down in every Forex trader's heart and mind constantly repeating "I don't want to lose".
It gets the best of us and although we know logically adding in to losing positions isn't the right thing to do, we still try to do it. Instead of adding in to a losing position, learn to accept losing is a part of trading and expect it. Then plan around it. Traders don't like what they don't expect. If you expect to lose, you are much more prepared for it. This will stop you from adding in to a lost cause.
It rarely goes in our favour when adding in and we normally lose a lot more than the one trade it would have been.
There are significant issues with adding to losing positions. I thought I'd list a few, for those who might have adding to losing positions as part of your strategy.
- A losing position is being held and is moving more negative with every second.
- The added position is going against you now as well so you're now losing double
- No one likes to lose when they added in more to win so you are at risk of adding in to this position again
- You are wasting a lot of time on a losing cause
- Losing like this can completely damage your Forex psychology
Avoid these 5 Forex mistakes I share in this Forex training
2 - Not Being Aware Of News That Moves The Market
I'm really surprised when people come to me with an issue. And ends up being a lack of awareness of news that affects the markets and subsequently people's trades.
It takes 2 minutes to type in Forexfactory.com in your web browser and check what scheduled news is coming out. The sad truth is, many traders haven't been told to do this.
I do this every day before I trade and frequently look back throughout my trading. This is a bare minimum. I frequently recommend traders use a live news feed so they can get all the news over the wire live but it can be expensive for some.
Even if you’re the best technical Forex trader to ever live, you need to make yourself aware of Fundamental analysis like checking for news and understanding the different data which can affect the markets.
Be Aware Of News
You might be lining up a potential trade and red hot news is on the calendar. It will at least make you aware. I'm not going to go as far as to say you don't trade but take it into consideration.
How important is the news?
When is the news being released?
Sometimes you should never trade before upcoming news. But some mild news may have no effect or may have already been priced into the market price. You should plan with this in mind
Are you making the number 1 Forex mistake? Click here now to find out, I'll send the answer right to your inbox.
3 - Complicating Analysis
Forex trading in it's simplest form is buying and selling. But many Forex traders over-complicate this process. This is a good one to finish on and links in slightly with #2. Everyday there are hundreds of different news releases, rumours, scare tactics that can knock a trader off their rhythm.
Many traders allow all of this stuff to get in the way and stop them from doing what they are supposed to be doing (buying and selling to make money).
When it comes to Forex trading, I always advise the minimalist approach. Remember, Forex is about buying and selling so just focus on this.
Are you not making money trading the Forex markets? It might be because of these 5 mistakes.
Other Distractions For Traders
Not only is all the news and rumours a huge distraction from traders taking trades, we haven't even mentioned trading systems, Trading group's ideas and trading software. If you are making this mistake, You will need to work through all of these components and then make a decision to either buy or sell.
It takes too long and too much time to constantly repeat this process. I was the same. I thought that the more trades I took, equalled the more money that would pour in. Boy was I wrong. many traders think this way in not only trading, but tools, strategies and time.
My Old Approach To Trading
I use to spend hours upon hours staring at charts, second guessing myself and taking loads of different trades. I then learned that was a mistake and started to trade for less an less time each day. I now only trade for 60 minutes a day and teach my students in my All in one Forex course too. Here are some of my popular public trade case studies (12% Forex profit, 6.2% profit)
There is no need to watch your computer screen for hours thinking about what trades to take. Someone actually said to me once something along the lines of "there is no way you can trade for 60 minutes a day". My course shows traders how.
So there you go. 3 Common Forex mistakes which keep you from making money trading the Forex markets.