The mistakes below are common amongst novice traders and ensure 90% of them lose and lose quickly - while novice traders make these mistakes so do experienced traders.
If you make them, you will lose so avoid them and increase your chances of success dramatically.
Here they are all ways guaranteed to lose you money.
1. You Can Buy Success
Many traders think trading is easy and they can buy success in forex trading for a few hundred dollars - major mistake!
Most forex education sold on the net is sold by marketing companies or failed brokers and simply doesn't work - if it did it would not be sold.
There is some forex education you can buy that's good and the best way to ensure it is worthwhile is only accept the proof:
A real time track record of profits no hypothetical simulations!
To follow a trading method you will need to understand how and why the logic works - if you follow it without understanding it, you will not have the confidence to follow it with discipline.
2. Being Clever Will Make You Money
On the other hand there are people who think being clever will make them money and they have a right to win because their clever - Another major mistake.
In many industries you get paid for how much effort you put in but not in global forex - you get your reward for being right and that's all.
Many traders devise complicated systems that are extremely clever and they lose.
It's a fact that a simple system will beat a complicated system, as its more robust with less elements to break.
Don't complicate your trading system or methodology, keep it nice and simple.
3. Knowledge = Power = Profits
While you need a simple trading system to succeed you also have to learn the right knowledge.
Knowledge for knowledge sake in forex trading won't make you money.
In fact most of the accepted wisdoms of forex trading are no help at all when trying to make money and that's why 90% of traders lose.
Lets take one example, online news sources will help you win, as your better informed.
Yes you are better informed but that won't make you money, in fact it will help you lose!
Why?
Because those news stories are just so convincing.
Think about it, these guys are telling stories their NOT traders and most news stories are convincing but dead wrong.
This is just one example and there are many more, where traders focus on the wrong knowledge and lose.
4. Day Trading Makes Money
One of the biggest myths of all is day traders make money.
Try and find one with long term track record of profits and you will look for years and never find one!
Why?
Because it doesn't work - great story but that's all it is.
It doesn't work due to the simple fact that all daily volatility is random and if the data is random, you can't get the odds on your side - PERIOD.
5. You Can Get Rich Quick
Yes you can, but this is not the norm.
Many traders think making over 100% is easy and over leverage, trade to much and take high risk low reward trades and then lose their equity.
Be realistic about what you can earn, in your first year if you made 50 - 100% then you would be up their with the top money managers in the world.
Take it slowly and look longer term - if you compounded 50% for 10 years you would be extremely wealthy at the end of the period!
6. Discipline
You here it time and time again - discipline is the key to success, but very few forex traders actually know what it takes to be disciplined, so here is a simple explanation:
To be disciplined relies on these three personality traits:
1. You must have a desire to succeed and accept that you are on your own and learn the right knowledge by developing your own trading reality.
2. This leads to confidence that you can achieve trading success.
3. From confidence comes discipline, to follow your trading methodology through the bad times without throwing in the towel, to achieve ultimate trading success.
Final Words
Read and digest the above and don't make the same trading mistakes in your forex trading.
If you avoid them you could soon be on the road to big profits - Good luck!
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