Learn Currency Exchange – 4 Deadly Mistakes Novice Traders Make and Lose
Filed Under (Currency Exchange) by admin on 16-12-2007
If you want to learn currency exchange, you need to avoid the 4 deadly mistakes enclosed in this article; there not the only ones novice forex traders make but there certainly the most common; you make them you will end up a loser so beware of them…
Here are the 4 deadly mistakes that you need to avoid to enjoy forex trading success.
1. The mechanical trading system with the simulated track record
You will find them all over the net and people fall for these and yet they have never been traded and all have this disclaimer read it carefully and you will see why if you buy one you’re destined to lose:
“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.
So what use is that?
You can make up anything in hindsight. Traders fall for these again and again and wonder why they lose – well they should have checked the above and then they would know – the so called profitable track record was made up.
If you want to learn currency exchange learn this – no one is going to make you rich for a few hundred bucks, life is simply not like that.
2. Predicting Forex Prices
How many traders think they have to predict forex prices to win? Most and if you try it you will lose. Why?
Because a forex trading strategy based on predicting prices is destined to lose, as prediction is simply another word for hoping or guessing and you won’t get far with doing that in life or forex trading!
In forex you don’t predict – you act on the confirmation of price movement.
Forget the scientific methods of such gurus as Gann, Elliot Wave and Fibonacci that claim there is a scientific method to forex price movement to predict forex prices in advance – there isn’t.
If there was a scientific method of forex market movement, we would all know the price in advance and their would be no market – common sense – but huge numbers of people fall for the science and prediction theories.
Trade the reality of price change only and forget prediction or your trading signals will be as accurate as your horoscope!
3. Trading the news and expert opinion
There are a lot of people who think they can trade news stories or listen to so called experts in the media.
The news is quicker and better researched than ever but will it help you win?
Of course not, it’s an opinion that’s all. News tends to reflect the greed and the fear of the majority and the majority always lose, so don’t pay to much attention to it.
Will Rogers once said “I only believe what I read in the papers” he was joking of course – but many forex traders take news stories from CNN or Bloomberg as gospel and lose.
4. Not Knowing What the edge is
Most traders simply try forex trading but have no idea they need a defined edge.
A defined edge is the reason you will win at forex trading when the vast majority over 95% of traders lose – what sets you apart?
Despite the low odds of success and the fact that forex trading is obviously not just a walk in the park, people plunge headlong into it without a well thought out forex trading strategy which can give them a trading edge – Do your homework and don’t make the same mistake.
So there you have 4 of the most common mistakes made by most of the losing majority avoid them get the right forex education, find your trading edge and trade with discipline and you will enjoy currency trading success.
