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Forex Trading - 5 Deadly Reasons Forex Traders Lose Money

In Forex trading, there are five common reasons traders lose money when developing and implementing their Forex trading strategy.

If you can avoid making these errors, you can enter the elite 5% of online Forex traders that make big consistent profits from the markets.

       
 
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   

Hereís the five common mistakes that you need to avoid when youíre trading in the Forex markets.

1. They Work Hard but donít Work Smart

Many new online currency traders work hard - but they donít acquire the right Forex education. FOREX trading attracts some of the cleverest people in the world - these traders are smart, and think that they can win simply because theyíre clever.  Being too smart however, can be a bad trait to have in Forex trading. A clever trader tends to see the market the way they want to see it - and they donít see the reality of how the market really is.

Do you want to make money or feel clever? The market wonít accommodate both - so decide before you start trading. If you want to make money, leave your ego behind, and simply focus on the main objective of Forex trading Ė making money. If you only focus on making money, youíll out perform a clever trader with an ego, whoís obsessed with beating the market.

2. They donít keep it Simple

As you can gather from point 1, being clever doesnít mean youíll achieve success in online Forex trading. Not only should you leave your ego behind, you should also concentrate on trading using a simple system. Many Forex traders think the more complicated their system is, the more successful the system is likely to be Ė however, this logic is incorrect.

Simple systems tend to be more robust than complicated systems, in the face of ever changing market conditions. When developing your own Forex method, keep it simple - and youíll have a better chance of making consistent Forex profits.

3. They donít accept Responsibility

When youíre trading currencies, itís tempting to follow a guru whose made money - or claims to have made money. The Internet is full of Forex education you can buy for $100 or so - and they all claim itíll make you rich - but this is not the reality of currency trading. The only way to succeed is to rely on yourself Ė no one else can give you success. If you canít take responsibility for your actions - donít trade in the currency markets.

4. Theyíre too subjective

In Forex trading, most traders like to use technical analysis, and study Forex charts. Studying charts can make you a lot of money - however you must be aware of the trap that many traders fall into - being too subjective. Avoid methods that need a lot of subjective analysis, such as Elliot Wave and cycles Ė instead use indicators that define trends.

Good indicators to use in conjunction with trend lines are:

Moving averages, and momentum oscillators - such as RSI, stochastics and Bollinger bands. This will keep you disciplined, focused, and allow you to trade without your opinions and emotions getting in the way.

5. They lack Patience

Many traders get impatient when Forex trading, and want to achieve success too quickly. They start trading using one method, get frustrated with it when it doesnít make money - and then switch to a different method. They then end up like a dog continually chasing its tail.

Bad periods are normally followed by good trading periods - and profits, (if youíre using a soundly based Forex trading system) so you need to stick to your plan. Stop changing systems and have the patience to follow your Forex signals with discipline.

The X Factor Ė Your Trading Edge

Anyone thinking of getting involved in Forex trading should ask themselves this simple question: What advantage over the majority of unprofitable Forex traders do I have, that will make me big consistent profits? This is your trading edge Ė if you canít think what it is - you donít have one!

A trading edge is something that all successful traders have. Now youíve read this article, youíll realize that getting an edge in Forex trading is not as complicated, or as hard as many traders think.

You simply need to work smart not hard, focus your Forex education in the right areas and youíll give yourself the chance to achieve consistent profitability.

The good news is that anyone prepared to learn Forex trading the right way, can become consistent and profitable.                                            by Stephen Todd