five common mistakes that you need to avoid when youíre
trading in the Forex markets.
1. They Work
Hard but donít Work Smart
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
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.
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.
They donít keep it Simple
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.
They donít accept Responsibility
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
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
Avoid methods that need a lot of subjective analysis, such as Elliot
Wave and cycles Ė instead use indicators that define trends.
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.
They lack Patience
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.
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
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
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
simply need to work smart not hard, focus your Forex education in
the right areas and youíll give yourself the chance to achieve
good news is that anyone prepared to learn Forex trading the right
way, can become consistent and profitable. by Stephen Todd