Here as part of your forex education are 10 common reasons new traders get wiped out. Make any of these mistakes and you will lose too. So avoid these common mistakes...
1. Buying a Forex Robot With a Simulated Track Record
If you want to win ignore the vast number of forex robots - they cost very little, promise a lot and wipe you out. There gains are all simulated going backwards knowing the data and this does not help going forward!
2. Day Trading and Scalping Systems
Day trading doesn't work as all volatility is random and you can't win. If anyone shows you a track record where they have won, it's normally just a simulation. Don't fall for the hype of day trading.
This applies to both points 1 and 2, there is no expert who can give you success, as success comes from within and having confidence in what you are doing.
3. Using to Much Leverage
You can get 200 or even 400:1, in terms of leverage but to use all of this is madness on a small account. Use maybe 10 - 20:1 - that is enough for most traders.
Leverage up to much and Volatility will get you.
4. Starting with a small amount
You get traders starting with $50 - 100, this is not really an investment at these levels, it's a gamble. Look to start with $500 -1000 minimum and preferably $5,000.
5. Believing You can Trade With low Risk
If you believe many people online, you would think you can trade with the odd loss here and there - but you can't! You will face many consecutive losses and they can last for weeks on end ( this happens to the best traders ) and you need to have the confidence and discipline, to take them until you hit a home run.
6. Predicting Market tops and Bottoms
Try and predict and you are hoping and guessing and your prediction will be as accurate as your horoscope. You can't predict in advance, so don't try, trade the reality of price change only.
7. Trading News
Those stories on CNN, CNBC and on all the other news channels are great stories but that's all they are stories and opinions. They reflect the majority who lose, follow them and you will lose to.
8. Trading too Much
You understandably want to be in on the action but most traders' trade to much and end up trading all the time - this will wipe you out, so have patience.
9. Trying to be too complicated
While some traders don't do any preparation and learn the basics and lose another major set think that being complicated and putting in effort means success - it doesn't. Forex trading is simple and you need to have a simple system and the discipline to apply it and that's all.
Make a system to complicated and it will break, in the brutal world of trading.
10. Know Your Trading Edge
You need to know what your trading edge is. Specifically, the reason you will win while the vast majority 95% lose and you need to have the confidence to apply it with discipline for success. If you don't know what your edge is, you don't have one and you need to continue your forex trading education until you do.
You can win at forex trading but you need to do the basics and get a simple system with an edge you can apply for huge gains. If you do this, then currency trading success can be yours.
