Forex Trading – What Will Destroy Your Account!
Here are some commonly held views on forex trading that if you believe them will see you lose and most traders do, so don’t be with the majority avoid these beliefs at all costs – here they are…
1. Forex Robots Work
You have seen them, present great track records but there all simulations in hindsight!
If you want to lose use one and you can do it quickly, by buying a forex robot with a simulated track record!
2. Trade Short Term
Day trading and scalping is destined to lose as all movements within a day are random. Again when you see a track record of someone saying they win at it – look for the world “simulated in hindsight” Day trading is a mugs game.
3. You Need to Predict to Win
If you think about this it’s simply guessing and no one knows what will happen next, so don’t predict, trade the truth and reality of price change only.
Before I forget don’t be taken in by all the scientific theories of market movement, if there was one, there would be no market as we would all know the price in advance!
Forget predicting and trade the truth of change of price as you see it in black and white on a forex chart.
4, Trading Breaking News
Waste of time – markets don’t move on the news, they move on how traders perceive it, that’s why markets rally when there most bearish and crash when there most bullish. If you think you can make money trading news, think again.
5. You can Make Big Profits on $100.00!
The amounts that many brokers ask for today is tiny and with the leverage and volatility in currency trading it’s like tossing a coin.
No one should consider trading less than $1,000 and preferably $5,000.
6. Use Leverage Available
This is the one that traders hang themselves with. Brokers give 200:1 as standard and even 400:1 and most traders like to use it – but volatility kills them.
Over leveraging wipes out the bulk of new traders 10 – 20: 1 leverage is enough for most traders.
7. All You Need to Win Is a Good System
Not true, its like having a high performance racing car, if you don’t have a careful disciplined driver, the car will crash.
In forex terms you can have a good system – but its going to lose and you are going to have to stick with it and ride out the losses. If you cant execute your trading strategy with discipline in these periods, you will never hit the home straight and win.
Think discipline is easy – think again, its not, even for experineced traders its hard to stay on course, when your losing money and the market makes you look stupid.
HOW TO WIN!
As you can gather you need to avoid the majority and get a simple system that’s logically and you can apply with discipline. It sounds easy but its not you need to work at it but don’t be dismayed your effort will be well worth it and you can soon be enjoying great forex profits on a regular basis.