ellliottt Posted December 23, 2010 Share Posted December 23, 2010 I would like to share with you information about the common mistakes a trader should avoid when getting started in forex trading. This is a list of common forex trading mistakes. 1. Using Too Much Leverage One of the biggest advantages of forex trading is the ability to use leverage or trading on margin. One of the most common mistakes that forex traders make is using too much leverage. Using too much leverage is when you have a small account balance, but make a big trade. If the market moves against your position by just a small amount, it can result in large losses. Commonly, the beginning forex trader will get emotional and nervous and close the trade for a sizable loss. 2. Over Trading Over Trading occurs when traders try to look for trading opportunities that are not really there. It happens to new traders very often, because they just want to trade. The result is usually a poorly executed trade that results in an eventual loss. Over trading can also result in traders making too many trades at once and using too much margin. 3. Picking Tops and Bottoms Many new traders attempt to try to pinpoint where a currency pair will turn around and start moving the opposite direction. This is something that is difficult even for professional traders. Quote Link to comment Share on other sites More sharing options...
boniez Posted January 4, 2011 Share Posted January 4, 2011 over-trading is the one thing that most causes of failure of the trader, because for those who do not yet have a stable psychology would have been tempted by the profits they are to do it overly and it is precisely the result will be loss Quote Link to comment Share on other sites More sharing options...
Kobkeaw Posted January 6, 2011 Share Posted January 6, 2011 Over trading is very danger for newbies traders. Because THey have too much greed and Try to invest very much. I think all of 3 choice is dangers and lead to loosing money. Quote Link to comment Share on other sites More sharing options...
indieover Posted January 6, 2011 Share Posted January 6, 2011 i don't know if using too much leverage is a disadvantage. i think using too much lot is more disadvantageous. cause when i use big leverage in one trading platform i don't see effect of having too much leverage. but choosing too much lot or bigger lot has big effect actually. Quote Link to comment Share on other sites More sharing options...
Nagilover Posted January 7, 2011 Share Posted January 7, 2011 We don't allow our emotion overcome our decision. Because It's very danger if emotion overcome decision in trading. Because It lead to loosing money very easy. Quote Link to comment Share on other sites More sharing options...
wasi90lkv1 Posted January 7, 2011 Share Posted January 7, 2011 i agree with no. 2. i think often many traders trade too many times in one day, they lose focus and lose money. i think traders should have daily goals and once they reach the goals daily they should take breaks. Quote Link to comment Share on other sites More sharing options...
mownabratadey Posted January 9, 2011 Share Posted January 9, 2011 I think all newcomers are doing this type of mistakes that could take them at big loss, nothing else, Either Their greed leads them to do that or they don't have enough skill how to work, so better to try with demo accounts virtually & get some experiences to overcome those mistakes in real trading.. Quote Link to comment Share on other sites More sharing options...
mundi Posted January 11, 2011 Share Posted January 11, 2011 This article is very useful, especially I am still a newbie ... there are many mistakes that can be made a traders ... this be a lesson for me Quote Link to comment Share on other sites More sharing options...
Hunter Posted January 12, 2011 Share Posted January 12, 2011 not using stop loss,take profit to take huge profit is one the big mistake newbies make in forex trading.also as mention by others over trading can kil your profit if you aren't very sure about the moves and doesn't have much knowledge in forex. Quote Link to comment Share on other sites More sharing options...
boniez Posted January 22, 2011 Share Posted January 22, 2011 not using stop loss,take profit to take huge profit is one the big mistake newbies make in forex trading.also as mention by others over trading can kil your profit if you aren't very sure about the moves and doesn't have much knowledge in forex. therefore they provide indicator strategy which we can use to determined when we will open, close, stop and take profit, however those are thebasic skill and newbie should know before goess to trade in the real account Quote Link to comment Share on other sites More sharing options...
t2t Posted January 23, 2011 Share Posted January 23, 2011 Before anyone start trading forex you need to know or be taught about money management. Looking at the first lesson, you will notice that it warns about using high leverage. If you have small fund in your account and opt for a high leverage, and incidentally the market turns against you, you will end up losing all your trading fund. Then you will understand the power of managing money. Quote Link to comment Share on other sites More sharing options...
standart Posted February 19, 2011 Share Posted February 19, 2011 1:100 leverage is different with 1:500 leverage. smaller leverage make us possible to trading with smaller lot or if choose 1:100, we can trading with $0.01 as smallest lot. but if 1:500 leverage, smallest lot is $0.10. Quote Link to comment Share on other sites More sharing options...
mohamedA Posted February 19, 2011 Share Posted February 19, 2011 Any trader should know what an leverage , this thing is so important and maybe it decide the way that trader will follow after , second important thing to avoid is feeling , never put your feeling in your trade no fair no happiness , and last thing to avoid is over trading , we should control our self if we loose let's close the software let's review our technique and the reason why we made it . Trying to change fast our choice will destroy us even some time we get profits . Quote Link to comment Share on other sites More sharing options...
sirwilly Posted February 20, 2011 Share Posted February 20, 2011 Regarding the issue of picking tops and bottoms, it is not nearly that easy. It is better for the trader to think f the support and resistance levels as zones rather than specific points. Quote Link to comment Share on other sites More sharing options...
andry777 Posted March 1, 2011 Share Posted March 1, 2011 @elliott I don't understand with your first point about using too much leverage. I think that is not only leverage that will determine our risk and profit in forex market but also how much volume of lot size that you used in each transaction. And the most determine is not leverage but lot size. So using high or low leverage, if you used low lot size that will be lower risk too. Quote Link to comment Share on other sites More sharing options...
chuna1985 Posted March 29, 2011 Share Posted March 29, 2011 Andry is right, i is not only high leverage that makes forex trading risky, but the major is lot sizes. It is high lot sizes that can lead to losses in our trades, i mean heavy losses, or even margin call. The concept of leverage and lot sizes must be learnt by all trades in order to make competent decisions in our trading career. Quote Link to comment Share on other sites More sharing options...
girlaloosh01 Posted April 2, 2011 Share Posted April 2, 2011 over-trading is the one thing that most causes of failure of the trader, because for those who do not yet have a stable psychology would have been tempted by the profits they are to do it overly and it is precisely the result will be loss Since a lot of traders are engaged in forex because for them the main goal of engaging to this kind of business is to gain profit. That's why a lot of traders who are really "obsessed" with money suffer in overtrading because of too much greed for money. And so with this, they just end up by losing all their capital. Quote Link to comment Share on other sites More sharing options...
andry777 Posted April 16, 2011 Share Posted April 16, 2011 @chuna Yes, that was right. Low and high leverage that we used, that will only give value each pips that we used in trading. But our risk will be determined by our lot size that we used in each transaction too. Usually, scalping will use higher lot size. Quote Link to comment Share on other sites More sharing options...
boniez Posted April 21, 2011 Share Posted April 21, 2011 @chuna Yes, that was right. Low and high leverage that we used, that will only give value each pips that we used in trading. But our risk will be determined by our lot size that we used in each transaction too. Usually, scalping will use higher lot size. but still leverage size affect endurance of our margin , because if you use a little leverage and use a small fund as well, then that will also cause we can not use the minimum lot which pprovided by the broker Quote Link to comment Share on other sites More sharing options...
ahmedrz3 Posted April 27, 2011 Share Posted April 27, 2011 all new forex members fall in small mistakes that make them leaving with big losses . I can say the most important thing that members should take into cosidration like you must set your own target plan before you enter the market ,this means not to open and close the market many times this will lead to a big corruption means big loss Quote Link to comment Share on other sites More sharing options...
boniez Posted May 10, 2011 Share Posted May 10, 2011 all new forex members fall in small mistakes that make them leaving with big losses . I can say the most important thing that members should take into cosidration like you must set your own target plan before you enter the market ,this means not to open and close the market many times this will lead to a big corruption means big loss mature plan is needed, such as preparation of funds or daily targets, because it is useful to avoid the occurrence of overtrade or not trading at all. Quote Link to comment Share on other sites More sharing options...
andry777 Posted May 15, 2011 Share Posted May 15, 2011 @boniez Yes, we must plan our trading and trade our planning. Many traders could obey their own trading plan because they couldn't control their own emotions well. And many other traders who didn't have planning in trading. Both of them are dangerous, didn't do planning and didn't have planning. Quote Link to comment Share on other sites More sharing options...
standart Posted June 16, 2011 Share Posted June 16, 2011 @andry777 trading plan is necessary as profit system. if trader not create it and have no purpose, usually can't survive long or even generate good profit in trading. after have a trading plan, trader should have patient attitude and trading keep on their plan. Quote Link to comment Share on other sites More sharing options...
Nikhil Posted June 26, 2011 Share Posted June 26, 2011 @standart you are absolutely correct because without trading plan how any trader will move . and its very true good trading plan give us continue profit but the problem is for newbie that at starting they dont have any plan which is natural because of lack of knowledge but they must learn about this to become successful. Quote Link to comment Share on other sites More sharing options...
andry777 Posted July 5, 2011 Share Posted July 5, 2011 @standart Yes, it's really important to create trading plan but it's more important if we could follow to trading plan which we have made. So trading plan and attitude is really important, without good trading plan we could get good profits and without good attitude, we couldn't get consistent profit. Quote Link to comment Share on other sites More sharing options...
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