Because of its impressive features and promising rewards, Forex trading is no doubt attracting numerous people to join the industry. Entrepreneurs, employees, self-employed individuals and many different kinds of people coming from different industries and walks of life get drawn to it. Truly, there are many opportunities in this trading, and lots of people want to give it a shot to make a good profit. And if you truly want to succeed in it, you must be equipped and wise.
Yes, you must be wise as a Forex trader and as a person in general. From your rookie stage up to your veteran era, you should not be reckless and complacent. In-depth knowledge about Forex trading is the first thing that you must acquire and work hard to obtain. By being informed and educated about Forex, you will be taught and trained on what to do to score in this venture. It is important that you know the strategies and techniques to follow in Forex trading.
Similarly, there are few things that can harm your trading results and can badly affect you as a Forex trader. Obviously, dodge them. Stay away from them. Want to win in Forex trading? Here are 7 things you must totally avoid!
1 – Being impatient
There is a process that you will go through before trading. Every time you trade, you follow certain steps. This means you have to work hard and to wait. Note that it is not a one-time thing that you will go through. There’s always a process to observe.
Because of that, being an impatient Forex trader will not help you. If you cannot remain calm and persistent while doing the step-by-step processes of trading in Forex, there’s a tendency that you will skip over some courses of action, which might lead you to losing. You might overlook the importance of small aspects with big roles in Forex trading. You might step into unfavorable trading habits because of impatience.
Impatience often leads to negative emotions. If you let it take hold of you, your trading techniques and your reactions to the results of your trading will be negatively affected.
2 – Skipping a demo account
Before entering the real battleground of Forex trading, traders are given a chance to experience trading without risks. That is through using a demo account. This offers a huge help, so that you will not be overwhelmed by Forex trading and end up in insufficient or wrong trading actions.
Skipping a demo account means you are skipping one of the first few crucial steps in Forex trading. If you don’t get to experience a trial period before setting foot on live trading, you have high chances of losing. Without a demo account background, you are risking your money and your opportunities.
3 – Investing your all in just one trade
Being confident as a Forex trader is essential. When you have an optimistic mindset in such a business, you will be motivated. However, this is different from being rash and overbold.
Say you are eyeing on a trade wherein the chances are either winning big or losing big. You feel like you will win big time. Your belief is that there’s no way for you to lose. Or you are too hopeful that really, you will win. That’s why you gave your everything to that trade, and focused only on it and nothing else. Days went by. One day, the results are out. Unfortunately, you lost. You lost not just your trade but all your money.
That is what could happen when you invest your all in just one trade. Unless you are 101% sure about that single trade, do not go all out for it. Distribute to other possibilities. Many businessmen fail here. Don’t be one of them.
4 – Letting your emotions take over you
Forex traders experience a wide array of emotions, and these highly affect their trading practices and outlook. Negative emotions can harm your decisions and actions, and sometimes, even positive emotions that become overwhelming can yield negative results.
Don’t allow your emotions to be your captain. Avoid letting them take over you! Although they may be valid, keep the control in your hands, so you will not act thoughtlessly because of them.
5 – Using unreliable Forex trading tools and platforms
You will find loads of choices of Forex trading tools and platforms that you can use to trade Forex. There are good options while there are better ones. There are good picks while there are bad ones.
No matter how practical you wish to be, using unreliable Forex trading tools and platforms is a no-no. These can direct your trading actions incorrectly; some even illegally. They might not be suitable for your trading style as well.
6 – Working with unregulated Forex brokers
Forex brokers are one of the people that mainly help Forex traders and aspiring ones to enter and continue trading Forex. The brokers you choose have an impact on your trading plans and patterns.
Working with unregulated Forex brokers is first and foremost outside the law before it can actually make you lose. Good Forex brokers are licensed and regulated; that means they are experts with the right knowledge and training in Forex. If you work with unauthorized Forex brokers, you cannot guarantee that they really know how to do the business. Some of them might actually be scammers.
7 – Ignoring a trading plan
Something that irresponsible Forex traders do is ignoring a trading plan. Doing so is an automatic key to losing. Trading plans are a must to begin every trade. Without a plan, you are not prepared to win. You do not have a furnished formula. You will just be taking harmful risks. Similarly, if you have a trading plan yet disregard it because you are choosing to follow your emotions, you can also lose.
Forex trading is a broad industry. There are many ways to win in it, but unfortunately, there are many (even more) ways to lose. To succeed, of course, you have to do your best to learn and execute the best Forex trading practices and methods. Seek assistance from Forex experts, brokers and traders who know better than you do and have experienced more than you have. Remember to deal with emotions smartly. Trade right.
When you know and see that your trading habits, plans and approaches will lead you to bad results, why pursue them? Avoid them quickly. Disregard making them one of your options. Give them up, and develop a better mindset that looks towards the opposite of the things you should leave off.
Forex trading is actually complex, so be smart. Do what you have to do. At the same time, avoid what you have to avoid. That’s how you become one of the smart Forex traders who win in this business.
ABOUT THE AUTHOR:
Nicole Ann Pore is a writer, an events host and a voice over artist. Quality and well-researched writing is her worthwhile avenue to enlighten and delight others about things that matter. She is a daytime writer for FP Markets, one of the leading forex brokers in the world. Nicole graduated Cum Laude from De La Salle University Manila, Philippines with a Bachelor’s Degree in Communication Arts.