What is Forex and how does it work?
27 November 2015
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- theforexscalper
theforexscalper
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Learn everything about Orderflow trading?
theforexscalper
Email us now :
info@theforexscalpers.com
Forex mistakes
No one likes losing money.
Even the richest of the rich hate losing money.
So fear will always be a part of this game.
Key is to find a way to switch it off and believe in yourself!
The Forex market is like any other business, most business aren’t profitable in the first years so don’t expect a miracle starting at the Forex market.
However, with the right skills and mindset you can be successful in a few months.
Don’t rush success.
It’s like surfing.
Learn to ride the waves and fear will be in your past.
Once you know how to ride the waves of the market or the sea you have little to no fear to take them on!
An emotion that is as old as Santa and the pope combined.
After a losing trade it’s pretty normal to feel revenge.
You want to make up for your losses.
People that have been to casino’s before probably know this feeling really well.
It’s also just the way our fantastic brain works.
To protect yourself keep in mind there is no such thing as a guaranteed winning trade.
So don’t take it personal when it is not your fault at all.
For example: You’ve just made a trade GBP/USD.
You’ve bought a lot USD.
An hour later something like 9/11 happens again….
Obviously the position of the USD is going down.
Was their anything you could do about this?
No! Unless you work fort he CIA or something like this.
Than again if you have a job like that you probably shouldn’t focus on trading.
Point is. Sometimes there is just noting you can do about it.
Why would you be hard on yourself and try to make up for it.
That’s the point were emotions are getting involved and you start losing more.
Greed is arguably the most dangerous of all emotions.
When you experience an upswing or streak of winning trades it can give you that wonderful feeling that you are the king of the world.
The feeling of: I told you so!
Maybe you think, oh well, this is just so easy let’s take some more risk.
I’ve proven to right all the time in the past.
Why would I be wrong this time…?
The human brain simly want more and more of that success.
This is were you need to stay humble, take your winnings, give yourself o pad on the shoulder and move on to you next winning trade.
There is the possibility to add more money to a successful trade.
This means higher the initial risk as well.
If you do this just out of greed your making a wrong move.
If you have a good reason for doing so than you’ve made the right decision.
Forex mistakes
When your account balance goes up doesn’t mean the size of you trade needs to go up as well.
When you know your goal and when you’ve reached it you probably won’t be tempted to risk your whole account blindfolded.
The avalanche effect of greed will occur when you hear success stories of other traders that make you want to have the same success as well.
Always remember that, even good trader, will only make 80% winning trades.
Meaning he losses 20%.
These 20 out of 100 losing trades can very well may be all in a row.
Does that mean you’re a bad trader? Not if you stayed with your plan and strategy.
When you don’t have your risk under control at every trade, you simply open the door for the friendly but emotionals neighbours to come in and dominate in your house.
We promise it’s hard when you start trading at the Forex market.
Because it is an emotional market.
It’s hard to stop trading emotionally once you’ve started or even admit you’re trading emotionally.
The game is about how much you lose or better said how you minimize your losses.
Not about your winnings.
We all have that gambling friend that always talks about his big winnings.
He never tells you about the day he lost $1000 on one hand of Black Jack does he?
A good example that shows you how important it is to minimize your losses.
You don’t want to lose that $1000 you’ve won with 100 hands on one hand do you?
So set your losing limit before you trade.
This has to be an amount that your completely OK with losing.
If you lose it’s just another day at the office.
Clarity and a good organization are the two aspects that your success will depend on.
What do we mean with organized?
Stick to your plan and read your trading journals.
Remember it is not a casino where you just gamble on black or red.
Forex is about knowledge and having a plan and stick to it.
99% of the traders make mistakes.
So here are the most common mistakes for you so you hopefully won’t make the same mistakes.
Losing trades are just another day at the office.
It’s just that simple.
Don’t let them get to you.
Every trader on Wall Street or trading from his home office will face losing trades.
A trader with a 80% success ratio will still lose 20 out of 100 trades he makes.
Keep your risk tight, safe and disciplined.
Unfortunately 90% of all traders are losing traders.
They lose their confidence, start doubting themselves.
This encourages them to pay for bad Forex services or even desperately let other “winning” traders trade on their account.
Again, there are many people with no winning track record willing to help you for a certain price.
Don’t be desperate.
Your will land power is all you need!
There are lots of fundamental impacts that could easily distract a trader.
Also there are a ridiculous amount of trading systems and trading software, which have lots of indicators and templates etc.
As a trader you’ve got to filter these indicators and narrow them down to the ones that matter the most for your own strategy.
WARNING: This could be difficult for a beginning trader.
It’s not necessary to spend hours and hours behind the screen analyzing the news or charts.
Keep it simple and stick to what you need. Keep it organized.
Most traders lose money simply because they trade too much.
We call this over-trading.
Over the years we have learned that traders succeed on their demo account but once the real game begins they start losing.
Once your real money is on the line your emotions are kicking in.
Prove that emotions can kill your account.
Over-traders purely trade on emotions.
Everything comes down to your technical skills and not your emotions.
So try to create an environment with little to no emotions for yourself.
This is done be being organized and having a plan.
Risk management is vital for success, safety and sustainability in Forex trading.
Risk management won’t let you lose more on a trade than your comfortable with.
Lots of traders forget about the chance of losing on a trade.
Ask yourself this question: “Why would you take more risk than your comfortable with?”
Even if you are one of the best traders or you have this unique talent to see the right spot to step in a trade.
Without good risk management you will never be a successfull trader on the long term.
Basic knowledge is to always go for more PIPS as your willing to lose.
Remember Forex is a job not a casino.
Traders who approach the Forex market as a gambler or as an addict to money won’t make the right decisions.
He will start thinking irrational and make Forex mistakes.
So don’t think of in dollars but think in PIPS.
Let me break that down for you.
When your mind is on the money and you think in dollars your risk management won’t work most of the time.
There is always this voice of the devil in your head saying “What if…” Or “Maybe this or that will happen”. Stop thinking like this.
Get these dollar signs out your eyes and start think like a real trader.
It’s not that easy as use a couple of big lot sizes and flee the scene when your positions are positive.
So always calculate your wins and losses in PIPS.
Always trade with more or less the same volume.
You trading plan has to have PIP goals and PIP risks.
How many PIPS do I want to win?
Or how many PIPS do I want to risk with this trade?
-No Game Plan:
Most common made forex mistakes is not having a game plan at all.
Traders just start out of the blue without a real strategy or plan.
If your watching sports, do you think the athletes don’t have a game plan?
I bet you a $100 that every team or individual athlete has a game plan.
Don’t think like all the other traders “I’m going to make my plan after I’ve done a few trades”.
You will end up with an empty account.
Right thing to do is keep track of your trades.
Make reports of your trades (a trade journal) so you can look back at what you did and maybe change your tactics a little bit.
Organized work like this will help keeping your emotions out of the game as well.
Remember that the game plan you started with doesn’t have to be the winning one, so call a time out, look back and adjust to a winning game plan.
Pretty cool right! You can be the coach of your own professional sports team!
“When I became a winner, I said, ‘I figured it out, but if I’m wrong, I’m getting the hell out, because I want to save my money and go on to the next trade.’” – Marty Schwartz
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Welcome to my author blog. With over 12 years of experience in the financial markets, Trading is more than a profession for me; it's a passion that has fueled my curiosity and determination. Over the years, I've explored various trading strategies, dabbled in different asset classes, and navigated through the ever-evolving landscape of technology and innovation. Through it all, I've witnessed firsthand the transformation of the financial industry. My mission is to share the wealth of knowledge I've gained over the years with you, my fellow traders and aspiring investors. Whether you're a seasoned pro looking for fresh perspectives or a newcomer eager to understand the basics, you'll find something valuable here.
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2 Replies to “Forex mistakes / The most mistakes made.”
Incredible article, Great study of the New trader’s mind set. There are storms of indicators and EAs on the internet, everyone is selling his own, but no one tells the deepest truth like in this article. I hope that I would find here more information and a good knowledge and powerful skills of trading.