Forex Trading Mistakes ? Try to Predict Prices and you Will Lose!

October 23, 2011 by  
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Forex Trading Mistakes ? Try to Predict Prices and you Will Lose!

Most novice forex traders believe that to make money in forex trading they need to predict forex price direction in advance to win. The fact of the matter is if you try and predict where forex prices are going to go you are destined to lose! It’s obvious really when you think about it.

If you try and predict you are hoping or guessing where prices will go and relying on hope or guessing, in any venture is not a good idea and in forex trading it leads to equity wipe out.

A Better Way To Trade – Confirm the Move.

You don’t have to predict though you can act on confirmation and if you do you are not relying on hope or guessing – you are getting the odds in your favour and this can lead to long term profits.

For example, a trader sees prices dipping to support and simply enters the market – he has no idea of whether the support will hold, he is simply guessing and hoping.

Trade Like a Pro

The professional trader doesn’t simply buy into support he WAITS For prices to turn up and watches price momentum to confirm the fact and when prices are moving away from support he enters.

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If you wait for price momentum to confirm support has held you are trading with the odds and this is the real way the professional forex trader’s trade.

No guessing or hoping they are trading the confirmation or the reality of price change to increase their chances of currency trading success.

How To Confirm Momentum.

If you know nothing about momentum indicators then you should – their an essential part of any traders Forex education.

If you want to learn forex trading correctly, you must understand and use momentum.

95% of Forex traders lose and in most instances it’s because they rely on hoping and guessing and don’t use the confirmation of momentum.

Great momentum indicators to look at are:

Average directional Movement ADX Relative Strength Index (RSI) - both were developed by trading legend Wells Wilder and the stochastic indicator developed by George Lane.

There are of course other momentum indicators but the above 3 are a great place to start.

When using a forex trading system you should use the following steps:

Look at tests of support and resistance and ONLY execute your trading signal - AFTER Momentum has confirmed your view.

You may well say that this will miss the bottom but you cant spot that in advance anyway (and no forex trader can) so don’t even try.

Forex trading is a game of odds and if you don’t get the odds in your favour you will lose.

Markets are a Game Of Odds Not a Science!

95% of traders lose, because they fail to grasp that forex trading is a game of odds and believe in scientific predictive theories like Gann, Elliot wave or following the Fibonacci number sequence – they don’t work.

Keep in mind Elliot died a pauper, Gann sold courses to survive and the Fibonacci number sequence had nothing to do with finance!

Play the odds and you can win, with your forex trading strategy –try and predict without confirmation and you are guaranteed to lose – PERIOD.

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Most Common Forex Trading Mistakes

September 18, 2011 by  
Filed under Latest News


by Tradingrichmom

Most Common Forex Trading Mistakes

Starting forex trading career is an exciting journey. The mind-blowing financial challenges, economic riddles, potential sky rocking profits and psychological effects - all assembled together in one profession. As a new forex trader you need to recognize the universal mistakes which can easily turn your forex trading adventure into unnecessary, costly ride. What are the common mistakes traders make and how can you avoid making them?

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Here is the summary of slip-ups every trader should avoid:

1. Risking Too Much
There is no way of getting rich quick in forex trading. You have to be consistent and disciplined, and by no means try to compare forex to gambling. Every dollar you invest in forex must be a dollar you can afford to lose, a dollar which will not leave you butt naked on a street. Every successful forex trader protects ones capital, and therefore instead of risking too much and praying for it to turn into a goldmine, it is more important to focus on good entry techniques and understanding of trend.

2. Overtrading
Most new traders think that in order to make huge profits you have to trade all the time. It is important to realize that forex market is volatile and changes direction all day long. You cannot expect profitable trades from every price movement. It is so easy to get addicted to winnings which can lead to sloppy trading. Depending on your trading style, the opportunity to profit strikes a few times a day and it is your job to figure out when it happens. After each win, give yourself a time out to ensure that you make right decisions based on your trading plan and not on the luring crave to win again! As soon as you learn to ignore all market swings, control your emotions and focus on profitable movements, you will become consistently profitable trader.

3. Errors in Order Entry
There is a time in every forex trader’s life when the wrong order entry is made. Whether the clumsy fingers or lack or alertness are to blame, awkward errors happen to all of us. To save yourself a lot of stress, avoid heart attack and evade losing money, take two extra seconds to check that everything is correct before you click!

4. Not Having Your Own Trading Plan
I believe that every trader is unique and requires different set of approaches when it comes to forex trading. Just because other traders succeed in scalping, for example, it doesn’t necessary mean that it is suitable for you. It is your responsibility to figure out what kind of trader you are. Are you a quick thinker or rather analytical? Are you aggressive or rather patient? Can you devote enough time to forex or you plan to trade part-time? What is your investment capital? Do you have a full grasp of fundamental analysis? What are your psychological weaknesses? The sooner you figure out who you are, the faster your trading plan will materialize and the better forex trader you will be.

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5. Losing is The End of the World!
There is no such thing as forex trading system that works 100% at a time. You can become crazy rich by being right only about 10% of a time. Kick the perfectionist out of your mind and open mind to a larger picture. The most important thing in forex trading is win/loss ratio. It doesn’t matter how many times you win or loose; what really matters is how much money you gain when you win and how much money you loose when you lose! Concentrate on monthly profits, and not on every single trade.

6. Ignoring Money Management
Money management is very important in forex trading. The purpose of money management is to protect you from risking too much and therefore grow your profits in a stable, consistent manner. Without a proper money management technique, you can empty your trading account within 5-10 clumsy trades.

7. Ignoring Psychological Issues
Psychology is a big part of forex trading. You have to train yourself to control your emotions, deal with losses and understand that success does not depend on every trade. Many traders keep a journal and write down not only the trading outcome, but their feelings and emotions during the trading hours. This can significantly help to analyze yourself and avoid, for example, overtrading, revenge trading, greed trading, ego trading etc.

8. Constructing Complicated Indicators
Simplicity is the best way in forex trading. You don’t have to keep adding indicators or come up with extraordinary trading plan. Many indicators only add chaos and unnecessary information. Try not to overdo it; the basic idea behind indicators is to give hints to direction of a trend, support/resistance levels and buying/selling pressure.

9. Trading News
Unfortunately, in most cases even the most straightforward news releases are used as a tool to affect the investment psychology of the crowd. This is, in a way, a manipulation used by governments and traders. Analyzing only the news can be quite problematic, since often a forex market that seems extremely bullish can actually be an undercover bear! It is close to impossible to predict how the market will react to the news. I personally have seen markets going down more than 100 pips in one second and rising 100 pips back up within couple of more seconds. That’s like playing a Russian roulette!

10. Using Too Much Leverage
The beauty of forex trading is the ability to use leverage or margin, however too much leverage can be extremely harmful. Having a small trading account and making big trades using leverage can turn into a complete disaster whenever the market moves against your positions by just a tiny swing.

11. Demo Trading The Amount You Don’t Have
Most forex brokers offer demo account for practice. My personal advice is to trade demo account with the amount of money you actually plan to invest. Usually practice account comes with hundreds thousands of dollars, so in order to actually learn how to trade and understand the forex market reality, it is important to demo trade the amount of your actual capital. It doesn’t make much sense to practice trading with thousands while you plan to invest 0.

12. Switching Strategies Like Pair of Gloves
You shouldn’t jump from one strategy to another the moment you experience couple of losses. Your forex strategy should not be discarded the moment things get rocky. Every strategy need time to be optimized. Changing strategy from one to another will not turn you into successful trader. Give it time, consider losses as a down payment for the future wins.

13. Seeking Shortcuts to Learning about Forex
There is no shortcut - you have to learn. Most successful forex traders know exactly what is happening in forex market. You have to read, learn, practice and analyze all the time in order to be up to date and make profits. Forex trading is a lifelong learning career. Since forex market is complex and very flexible, a lot of learning is needed in order to adobt to new changes and become a skilled trader.

14. Ignoring Stop Loss
Ignoring stop loss is a no-no! You need to have a clear entry/exit plan. Decide now many pips you want to make, what is your loss limit, what are the reasons for entering a trade in the first place. Sometimes you have a feeling that if you want a little more your luck will turn around. No, this is a very bad idea. Stick to your plan and always set stop/loss targets. There is no such thing as a “trade of a life time”. If you miss one, there Is always a set of new trades right around the corner!

15. Deciding on Forex Broker Too Quickly
Choosing the right broker takes time - so get ready for a long ride. There are hundreds online forex brokers today and all of them are attractive in one way or another. It is important to figure out which broker is most suitable for you. A broker good for one trader might not be the best choice for the other. There are many factors to consider, including:

¨ Trading Platform (download, online, metatrader 4, user-friendly, graphical etc.)
¨ Regulation (regulated brokers are usually more reliable)
¨ Features (news, daily analysis, mobile trading, free seminars, bonuses etc)
¨ Technical and Customer Support (it is important to have all the contact information for the broker including phone number, online support and email address. I also suggest testing all of the contact methods before making a deposit with the broker - Do forex broker representatives answer the phones? How fast does the broker respond to emails? Is online support proficient and professional?)
¨ Terms and Conditions (always go over terms and conditions you agree to with a forex broker. You might find nasty hidden costs involved or certain unprofitable trading conditions)
¨ Spreads or fixed price (the lower the better, of course!)
¨ Free Practice Account for practice and get to know the trading platform
¨ Minimum Deposit Requirements (How much are you planning to invest?)
¨ (Payment Methods (how are you planning to deposit/withdraw? Wiretransfer? Credit Card? Paypal? Moneybookers?)

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Mistakes that a Forex Trader should Avoid when Using Forex Robot Software

September 6, 2011 by  
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Mistakes that a Forex Trader should Avoid when Using Forex Robot Software

If you are a forex trader or if you are currently contemplating of participating in the forex market, then you are probably aware of how important forex robot software is in making you formulate the best decisions in forex trading. This software is known to be a big help to forex traders when it comes to trading. It has the ability to calculate and analyze the current and future trends in the forex market. Because of the software’s ability to predict market trends, forex traders are greatly helped when it comes to decision-making.

Even with the software around, there are still forex traders who fail in the foreign exchange market. It is primarily because they commit the most common mistakes done by most forex traders who fail in forex trading while using the software. If you wish to be extremely successful in the field of forex trading, then you should be aware of these common mistakes and learn to avoid them. One of the most common mistakes that you need to avoid is putting too much faith on the software. This happens when you put your full trust on the software without putting limit on the amount that you trade. Most of the time, this mistake costs forex traders several dollars. Because of this, you should make sure that you put limitations when doing trades. Never allow greed to cloud your decision. You can invest 10% to 20% of your deposit to ensure that you only have a small amount of loss if ever the prices of the trade go against you.

Another mistake that most forex traders commit while using forex robot software is that they left the software alone to formulate decisions and do the trades automatically without actual monitoring. Even if the software has the ability to predict trends, it is still important that you are around to monitor it. You should be able to closely monitor the news and the chart for sudden fluctuations in order for you to prevent losses. True, this software is very useful when it comes to trading but you should not completely rely on it to become profitable. You have to work hard as well to get extremely rewarding benefits.

Are you looking for more information regarding Forex Robot Software? Visit www.realforextrading.info today!


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Forex Trading Tutorial - The Top 4 Mistakes Novice Traders Make Which Cause Losses!

August 4, 2011 by  
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by Tradingrichmom

Forex Trading Tutorial - The Top 4 Mistakes Novice Traders Make Which Cause Losses!

—-> Forex Trading for Winners

In that Forex trading tutorial, we will look at common mistakes created by most beginner bargainers which induce reds and as well look at some tops to assist get you on tour to Forex trading achiever. Forthwith, lets look at how to put down the elite group 5 % of mongers who create large amplifications trading in currentnesses.

Before our summits for success, lets look at the main reasons dealers lose money.

1. A vast number of tyro bargainers purchase inexpensive Forex golems and cogitate they will create money with no travail and they suffer. It’ should be jolly obvious to anyone, you don’t get an income for life, in a marketplace where 95 % of mongers lose for cc dollar signs.

2. Another grouping of bargainers kinda than creating no travail create to often! You get the intelligent person who cogitates he can beat out the marketplace with a ingenious scheme but all he does is create a system with to many chemical elements to break. The best organisations are unsubdivided and robust so you don’t postulate to be intelligent to determine one of these. Other mongers recall the more they work and the more they deal, the bigger the lucres are they will create and they lose as well. If you sell to a fault ofttimes you will take low betting oddses patronages and increase your opportunities of suffering.

3. Leverage is the bombination word which draws in bargainers to Forex because it makes heavy profits but but then it besides makes risk of exposure. Agents give 400:1 or more in leveraging so bargainers utilize it and suffer! If you are a tiro bargainer 10:1 leverage is a good quantity to start out with and you should never use more 50:1.

Intimately every tiro bargainer over leverage’s their explanation - don’t create the same error.

4. Most tiro mongers detest being wrong and flow red inks and this still with temperate leverage goes to disaster. In Forex trading, you take to cut reds rapidly and you can have far more losers than successes,  as you hold your red inks little and feed your gains. If you are an emotional person who detests being wrong, don’t deal Forex.

—-> Forex Trading for Winners

How to Win at Forex.

The above are not the alone reasons tyro bargainers lose but their the main reasons and if you understand them, you will right away know how to love Forex trading succeeder.

You ask to instruct the basics and not trust automatised software package but because the best organizations are unsubdivided, anyone can instruct how to pee profits with them. You besides don’t require to work hard and sell very much to bring home the bacon which intends, you simply require to drop Half hour a day on your trading strategy. In the end, you require a disciplined mind set to deliver the goods but anyone can take to be checked if they desire likewise.

If you desire to revel Forex trading success you can and for the endeavour you have to put in, there is no more rewarding occupation than trading world wide Forex from nursing home.

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