As 2019 starts to unfold, you’re probably thinking about new ways to earn money, so that you can boost your retirement savings.
Forex trading is a good way to earn an extra buck, but there are some crucial Forex trading mistakes you need to avoid.
Not testing enough
There are countless test Forex accounts that allow you to ‘play’ without investing your real money into trading on the foreign exchange market. Most allow you to use the account for about a month and then require you to pay.
Switch companies, if you have test traded for a while and still cannot seem to get the hang of it.
If, after weeks of testing, you are still losing money, it means you need to learn more about Forex before you can get out in the ‘real world’.
Don’t start spending your money, until you see some results.
Not getting informed well enough
Right now countless websites provide accurate stats and trading insights.
Details, statistics and tips for you to get better results with your trading. Make sure you do your homework.
Don’t trade without looking at the data, even if it’s time consuming and boring. Studying the stats can give you invaluable information about the Forex market and allow you to earn money trading on it.
Not having a trading plan
Forex is NOT gambling. It’s not related to luck or sheer inspiration.
These seldom work for seasoned traders and, while you might get lucky few times, you’ll lose money on the long run.
Set a system. A plan. And be consistent.
Having a plan allows you to keep a professional look on your trading and make fewer mistakes.
When it comes to business, emotions will only ruin it. It’s the same with your Forex investments.
Don’t do it if you are stressed out. If you are too happy or sad.
If you cannot trade calmly, then skip it. Or use one of your systems which will prevent any emotional decisions.
Not caring about the news
Most of us hate the news and couldn’t care less about what’s happening in some remote country.
But, since you’re trading currency that’s international, you should pay attention to what’s happening as well. Politics and economics, while horribly boring for some, are absolutely relevant for someone in the currency exchange market.
Not using a stop loss
This can have catastrophic effects, since it leaves your account exposed. Depending on the leverage you have, your can blow off your capital in an instant.
A stop loss defines your risk in the trading market and it protects you, if the trade doesn’t work. Instead of losing a lot of money you can cut your losses, if the market is moving against you.
Risking too much of your capital
Beginner traders think that huge risks bring huge results.
But it’s not always the case, since risking a lot will bring in loses in the long run.
A common rule is that a trader should risk about 1% of capital (difference between entry and stop price) in a single trade, or even less.
What other Forex trading mistakes would you add?