How NOT to trade Forex

As you might have already noticed, trading on Forex can be a bumpy ride. If you have been spending your free time on the market investing and following the charts, you know that one day you can be a winner and the next day you might be back at zero if you are not careful and focused. Inexperienced traders are prone to repeating the mistakes over and over again without doing anything to correct their style of trading, or they are simply unable to identify the pattern of their miscalculations due to the fact that they still have a lot to learn. So how can you avoid these errors? Here are some common mistakes which occur among the traders.

Being Constantly Distracted

Most of us have a tendency to open a lot of tabs in our browsers, watch videos, or read articles which have nothing to do with trading on Forex. We are all guilty of that. However, in order to actually be a successful trader, you need to be focused on Forex and Forex only. If you are doing everything else but watching the charts, the chances are you will miss great trading opportunities and feel sorry later. So instead of spreading yourself all over the place, your mind should be occupied with only one thing – trading.

Overconfident Trader

Every now and then, a winning streak will happen to you. The most important thing you can do afterwards is not to lose everything you won in a single trade. Traders who are new to Forex tend to abandon their initial plans and go big. Trading outside the comfort zone can be a downfall so no matter what happens you should stick to your trading plan. There is no need to risk everything you have on your account just because you have a feeling that the market will go in a certain direction. So flip through your trading journal, remind yourself of the rules you have previously set. Do not risk anything unless you are one hundred percent certain of your decision.

The Disappointment

Losing money is unpleasant. There is no doubt about it. After all, you are trading in order to increase your funds. You will feel emotional and there is a chance that you will do something irrational. Or even give up on trading altogether. Losing streaks are bound to happen and a trader should be mentally prepared for that situation. Emotions and taking the circumstances personally can damage your trading strategy. Some traders start questioning their plans and decide to make huge adjustments in order to get back the money they have lost during the losing streak. Traders who eventually return their funds are those who stick to their previously set strategies until the crisis is over. So make sure you follow your own rules at all times and keep a cool head.

Dreaming of a Quick Money

If you are trading because you want to become a millionaire in just a couple of months, then you are on a completely wrong path. Trading on Forex takes a lot of time and effort, as well as consistency. You will have to learn about the market, stay informed, follow the media outlets, read the economic reports on a daily basis. Yes, it is just like a regular job and it requires a lot of hard work and preparation before you actually start earning big money. So if you are in it for the quick money, the chances are you will fail.

So what can you learn from this? You need to know how not to trade Forex and these are the situations and habits you should avoid, or simply try to fix as best as you can. Basically, a successful trader is focused, has a control of the situation and keeps his or hers emotions at bay. I believe that every single one of us can become exactly that with a healthy dose of trial and error.

This article has been contributed by ForexTradingBonus.com