Hello dear friends! Today we will continue to analyze the popular mistakes of beginners in the Forex market. From the article you will learn what you don’t need to do to become a successful and self-confident trader.
Be sure to read the first portion of the errors described in the first part of the article on link… I will not postpone it, let’s start.
Trading on the news
As you know, there are two types of traders, one make trading decisions based on technical analysis of charts, and the other use fundamental analysis (economic news, macroeconomic indicators).
It is much more difficult for a trader who uses only fundamental analysis to make money, since when macroeconomic indicators are released, the market behaves unpredictably, a real rally in price. The price moves and wobbles from side to side so fast that while your order is being processed by the broker, you will receive a requote or worse slippage prices.
Trading on the economic calendar is deposit suicide, more suitable for those traders who lack the thrill. But seriously, traders working in fundamental analysis, as a rule, have education in economics and finance, and naturally have experience in this area.
And these are not intraday specialists, nor scalpers, they work in the long run. Those fundamentalists, who a couple of years ago calculated what would happen to oil prices now, made good money on this. Watch the fucking Falling Game and you’ll understand everything …
Conclusion: if you are an economist by education and with extensive experience in the world economy, then it makes no sense for me to teach you, you yourself know what you are doing, and for the rest I do not recommend trading according to the economic calendar. At the time of news release, the price becomes very volatile, which makes it impossible to smoothly enter and exit the market. In addition, most of the market participants have probably already reacted to the news before you had time to click on Buy or Sell.
There is no trading plan, and if there is, then they don’t stick to it
Before you start trading for real money, you must develop your strategy with a clear set of rules and money management…
Next, what you have to do is draw up a trading plan for the upcoming trading day or week, read the article “How to organize your work on Forex“, In it I focused my attention on drawing up a plan.
Often the problem for the newbie trader is not that the plan is wrong, but not wanting to stick to it. You make the plan in an emotionally calm state, with sober thoughts, you weigh everything, but sometimes you have to execute it in strong emotional stress.
The trading plan says that now you need to take profit, but the toad chokes you, you want to survive more from the market, as a result, the price reverses and you are in the red.
Conversely, you refuse to admit that you made a mistake in entering the market, you do not want to put up with losses, in the hope that the price will turn in your direction, you move your stop, and you suffer even more losses than originally planned.
Let’s be honest, each of us was in such situations. Strictly following a trading plan is a serious test of discipline, if you cannot get yourself together, you will always have negative statistics.
Conclusion: the market does not forgive moments of weakness, if you show it, then it will tear you apart both emotionally and financially, and you will lose all the money you earned! To become a successful trader you have to be disciplined and always stick to your trading plan, the fuck you drew up then. Discipline is the key to success in the Forex market!
Don’t learn from your mistakes
Beginners first open a position, and then think and ask questions. You can understand their excitement, the first time on the market, the first deposit. I remember very well, I lost my first deposit – $ 135 so quickly that I didn’t even understand how it happened. And I’m sure 100% of traders have similar initial experience.
At this point, you say to yourself, “You need to learn a little more about the Forex market,” and you start to study materials about it. This is good, just remember that the market is dynamic, and you rarely find an identical scenario in textbooks, and the market does not always behave according to the scenario. Don’t get hung up on theory, practice real trading.
Real experience comes from real trading, no matter how much you train and hone your skills on demo accounts, even for a few years, you will not become an experienced trader from this, experience comes from real trading.
Turn all your mistakes into a lesson for the future. If the theory tells us that this is a bad idea, but you see the effect from it, and then you get “in the head” in the form of a stop loss and margin call. You understand that you cannot do this anymore, but why, after a while you again step on the same rake.
Use your mistakes as a path to success. Traders who do not learn from their mistakes, most likely, treat trading like gambling (they want to get rich quickly) or their financial condition is in a deplorable state that they are forced to take such risks, or they are out of order.
Learn to accept failure and don’t be discouraged by it. As the saying goes, “A negative result is also a result.”
Conclusion: if you want to become a successful trader, it is very important that you learn from your mistakes. Use your mistakes as a springboard to move forward. I already wrote, I will repeat once again the wonderful phrase “Failure is part of luck.” And do not be afraid to trade for real money, only real experience will teach you what is not in the books.
Do not use pending orders
There are two types of “stop” and “limit” pending orders. In short, “stop” orders (Buy stop, Sell stop) are used on a breakout, “limit” orders (Buy limit, Sell limit) are used on a price rollback. Read more in the article “Pending orders on Forex”…
The best way to interact with the market is to trade with pending orders. I installed it and forgot, no need to sit in front of the monitor and wait for the price to reach the level at which you intend to enter the market, the pending order will be triggered automatically. But beginners often do not pay due attention to pending orders.
There are only advantages from the use of pending orders, firstly, there are no harmful emotions with which beginners still cannot cope, the psychological side of trading does not so much affect decision-making. Secondly, a lot of free time is freed, you are not tied to the monitor, you can calmly go about your daily life.
Conclusion: pending orders are the best traders’ helpers. They allow you to customize your trading, as you want, orders will be processed only under certain conditions set by you in advance, do not miss this opportunity.
And in the end….
The last point for today is aimed at novice traders who do not want to make any effort to understand and analyze the market. They want to sit back and let someone make trade decisions for them. I’m talking about those who are chasing magic advisors, purchased signals, etc.
The pursuit of such products is a dead end for the future trader, they rarely give good results. Sooner or later, you will drain your deposit, and given that you do not understand anything about trading, this will happen much faster.
To become a successful trader, you must take your work seriously and not be in the clouds. Don’t look for an easy way, it doesn’t exist, trust me. You need to remove all greedy thoughts from your head and focus on trading yourself.
That’s all for today. I hope that you have learned a lot of useful things for yourself from my articles and that you will definitely take everything into account in trading, and, of course, you will become a successful trader. Good luck with your trading!
Best regards, Evgeny Bokhach
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