common forex mistakes
1) Reading news and analizing them
Many times, seemingly straightforward news releases from government agencies are really public relation vehicles to advance a particular point of view or policy. Such “news,” in the forex markets more than any other, is used as a tool to affect the investment psychology of the crowd. Such media manipulation is not inherently a negative. Governments and traders try to do that all
the time.
Often, news that might seem definitively bullish to someone new to the forex market might be as bearish as you can get.
2) Don’t trade surges.
A price surge is a signature of panic or surprise. In these events, professional traders take cover and see what happens. The retail trader also should let the market digest such shocks. Trading during an announcement or right before, or amid some turmoil, minimizes the odds of predicting the probable direction. Technical indicators during surge periods will be distorted. You should wait for a confirmation of the new direction and remember that price action will tend to revert to pre-surge ranges providing nothing fundamental has occurred.
3) Simple is better.
The desire to achieve great gains in forex trading can drive us to keep adding indicators in a never-ending quest for the impossible dream. Similarly, trading with a dozen indicators is not necessary.
Many indicators just add redundant information. Indicators should be used that give clues to:
1) trend direction,
2) resistance,
3) support
4) buying and selling pressure.
4) Using high leverange with a huge quantity of trade
If you will trade having in an account 1000$ and making trades of 2 or 3 lots (200 000
or 300 000) with high leverange you are playing with fire. Today you can choose brokers that will offer leverange of 400:1. So you will be able to use 1 lot just for 250$ and one pip trade will be 10$. Brokers are doing that knowingly - they gets more for the spread and waiting for you to make an additional deposit.
5) trying to scalp
It is common mistake in traders. They are using also a lot of monitor to look at a few pairs at the same time. They wants to have from trade 2-5 pips. Today brokers offers 1.5 to 5 pips for the spread in major pairs. That will encourage traders to scalp and making them richer.
Trader that is using that technique has a small margin of lapse. They will say that in forex it is impossible to gain more than 10% monthly.
I have tried few methods and I can say that if you will use the simple methods and putting orders for a 2-3 weeks you can gain more than 30% in interest rates and difference in course.
6) gape at the charts all the time
Beginners in forex will stare all the time looking at the charts. They will try to catch the best price, pits and hillocks of the price. So they will try to scalp. It can lead them to make an another deposit.
the time.
Often, news that might seem definitively bullish to someone new to the forex market might be as bearish as you can get.
2) Don’t trade surges.
A price surge is a signature of panic or surprise. In these events, professional traders take cover and see what happens. The retail trader also should let the market digest such shocks. Trading during an announcement or right before, or amid some turmoil, minimizes the odds of predicting the probable direction. Technical indicators during surge periods will be distorted. You should wait for a confirmation of the new direction and remember that price action will tend to revert to pre-surge ranges providing nothing fundamental has occurred.
3) Simple is better.
The desire to achieve great gains in forex trading can drive us to keep adding indicators in a never-ending quest for the impossible dream. Similarly, trading with a dozen indicators is not necessary.
Many indicators just add redundant information. Indicators should be used that give clues to:
1) trend direction,
2) resistance,
3) support
4) buying and selling pressure.
4) Using high leverange with a huge quantity of trade
If you will trade having in an account 1000$ and making trades of 2 or 3 lots (200 000
or 300 000) with high leverange you are playing with fire. Today you can choose brokers that will offer leverange of 400:1. So you will be able to use 1 lot just for 250$ and one pip trade will be 10$. Brokers are doing that knowingly - they gets more for the spread and waiting for you to make an additional deposit.
5) trying to scalp
It is common mistake in traders. They are using also a lot of monitor to look at a few pairs at the same time. They wants to have from trade 2-5 pips. Today brokers offers 1.5 to 5 pips for the spread in major pairs. That will encourage traders to scalp and making them richer.
Trader that is using that technique has a small margin of lapse. They will say that in forex it is impossible to gain more than 10% monthly.
I have tried few methods and I can say that if you will use the simple methods and putting orders for a 2-3 weeks you can gain more than 30% in interest rates and difference in course.
6) gape at the charts all the time
Beginners in forex will stare all the time looking at the charts. They will try to catch the best price, pits and hillocks of the price. So they will try to scalp. It can lead them to make an another deposit.
posted by onlineforexsignals at 11:06 PM
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