The Two Biggest Mistakes New Forex Traders Make By John Angelache

The Two Biggest Mistakes New Forex Traders Make
By John Angelache

If you’re new to trading the forex market then this article will help you avoid two costly mistakes.

As you may already know, the forex is the largest financial market in the world. Over $1.5 trillion dollars pass through it on a daily basis. Due to its size and liquidity, the forex is fast becoming the trading forum of choice for many investors.

New forex traders need to be careful. The forex, like any other market, has its own special risks. However, the two biggest mistakes new forex traders make are common to any form of investing.

What Are These Costly Mistakes?

Well, the first one is: Getting bogged down with technical stuff. In common terms, that’s referred to as “paralysis of analysis”.

Like most financial markets there are an almost indefinite number of factors one can look at before making a trading decision. All sorts of indicators exist like support and resistance levels, moving averages, pivots, oscillators, Fibonacci and trend lines.

The big problem for new traders is these indicators create confusion more than anything else. The solution is to find a trading method that simplifies the process. Perhaps the simplest trading method is one that relies on only two or three easy to measure indicators. Anything beyond that stifles most traders.

The second mistake is…

Letting Emotion Dictate How You Trade!

All investing markets are driven primarily by the emotions of fear and greed. Whether we like it or not that’s just the way it is.

Panic selling and holding on to a position to squeeze out every last pip is typical. But emotional trading leads to bad decisions and, usually, an empty trading account.

Keeping your emotions in check is actually not that hard. First of all, go into any and every trade with a complete plan. Know when and where you’ll enter and exit. Determine ahead of time where you’ll place your stop losses. Secondly, don’t abandon your plan in the heat of the battle. Keep your objectives in sight and follow through.

One more thing: Paper trading properly will help you avoid these mistakes. Pretend your demo account is real. Find a simple trading system that relies on two or three indicators at most and…

Master It During Paper Trading!

This way you’ll go into the market armed.

By making each trade as real as possible, you’ll learn to develop trading plans and stick to them. Again, it’s all about simulating a real experience in a practice environment.

In conclusion let me just say this: (1) Find a simple trading system that won’t bog you down with too much analysis and learn it. And… (2) Learn to take emotion out of your trading decisions by following the guidelines above. You’ll become a better, more successful trader.

John L. Anghelache publishes a free online
newsletter that helps beginners to the forex
market trade for lower risk and higher profits.
Go to… http://www.ForexProfitSystems.com/FTMEzine.html

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