(c) Copyright 2007 by David Sodergren
Did you know that 95% of all who tries forex fails?
If you think about going into the currency trading business
then you need to know this: 95% of all people who tries
currency trading end up losing money. In this article we
will point out the 7 most common mistakes beginners make and
what you can do to avoid them.
Common Misstake #1 Trading Currencys Instead of Trading
Currency Pairs
A common mistake among people who tries forex for the first
time is currency versus currency pair.
In forex you trade currency pairs. You need to find out how
these two currencys impact on each other. If you just look
at one currency things will go very bad. You need to know
the both sides of the coin when you trade.
Solution:
Research as much as you can about the two currencies and
not just one.
Common Misstake #2 Not Keeping Focus
Another mistake among beginners is not being focused. Dont
do the mistake of “thinking” that you going to make alot of
money and then spend it before the profit has become
reality.
Solution:
Focus on what you are doing right now. Then set reasonable
stop losses when you do the trade. Now there is nothing
more you can do. The market will do what it wants. Just enjoy.
Common Misstake #3 Doesnt Have a Strategy
Many newcomers doesn’t have a strategy. They just think: Ok
my strategy is to make some money on forex.
Dont do the mistake thinking that “making money on forex”
is a strategy.
Solution:
A strategy should be like a map. You should write down
which pairs you want to trade.
How you want to trade it, when, how much, etc.
Without a strategy you dont really know what to do. With a
plan or a strategy you will find that its becomming much
more easier to focus.
Common Misstake #4 Lack of Knowledge
You need to know how the system works, dont just open an
account and think that you will make money.
The lack of knowledge is almost a sure-fire way to lose
money on forex.
Solution:
Learn the system. You need to know the basics. Understand
this: Global events and news are the biggest influencers.
Then you have to research how different events influence
the market.
Common Misstake #5 Too Cautious
One mistake is to place stop losses to tight. The fear of
losing money takes charge and stop losses are put to close.
Solution:
Give your trade a chance to prosper. Set a reasonable stop
loss so your trade has some space to move on and a chance
to produce a profit.
Common Misstake #6 Let Emotions Decide
This one is the most common mistake beginners make. They let
emotions in and allows them to take control. This is very
unwise. We make more mistakes when feelings and thoughts are
allowed to make trades.
Solution:
Follow your strategy and do it to 100%. When you created the
strategy you were analytical and logic. Forex is much math
and logic.
Dont let your feelings fool you.
Common Misstake #7 Trying to be Smart
Beginners think that you will have to be very smart to trade
forex. They spend hours and hours to check historical
trends.
A matter of fact most successful people with forex doesn’t
try to be smart. They have a strategy and are following
it.
Solution: Try to look at things as playful and fun. Dont try
to be smart. It’s better to follow a good trading strategy.
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You see, it all comes down to knowing how currency trading
works and be able to create/follow a good strategy. Forex
trading doesn’t have to be so hard if you focus on the right
elements. Having a good startegy and have the balls to
follow it through.
Do you have what it takes to be with the successful 5%?
Ofcourse you do!
Now go ahead and learn how currency trading works.
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More tips on forex for beginners can be found here Learn currency trading