Forex Training: Deadly Forex Mistakes That Assure Failure
Carl's 2 Cents:
I like how the article
was written. Even though all the "Don'ts"
were mentioned in the article, they were
actually "must have" in the Forex trading.
We must have a reliable strategy. Stop
loss is a must. Risk and money management
is absolutely essential.
Before venturing into your trading journey there are some things
you need to be aware of, otherwise you could succeed on your
trading adventure, and we don't want that to happen, do we? This
Forex training guide will help you track the most costly
mistakes Forex traders do.
First of all, make sure you don't have a trading system. Having
a trading system might increase the odds of your success. If you
have a system, you will have an objective way to get in and out
the market. When traders create their trading systems they think
objectively since there is no position to be taken at the
moment. If there is no position to be taken, there is also no
money at risk, if there is no money at risk, we do think
objectively and are open to every possibility, thus we are able
to find low risk trading opportunities. So make sure you don't
have a system and trade based on a randomly approach.
If you have already created your system, then don't follow it,
be undisciplined. If you follow your system, there is a
possibility that you can profit from the Forex market based on
the trading opportunities you have found. If you want to fail on
your trading, be sure to be undisciplined.
Don't get educated. Most successful traders are very well
educated in the market they trade (stocks, Forex, futures, etc.)
If you get educated, you might acquire the knowledge and
experience you require to master the Forex market. Don't read
about the Forex market, don't enroll into Forex training
programs and don't even look at historical charts.
Don't use any money management technique. The purpose of money
management is to avoid the risk of ruin, but at the same time it
helps you boost your profits, allowing them to grow
geometrically. For instance, by using no money management
techniques, there is a possibility that in loosing 10 trades in
a row you could empty your trading account. On the other hand,
by applying simple money management techniques you can avoid it.
So make sure, if you want to fail, don't even consider money
management.
Forget about psychological issues. You need to get every trade
to win. Successful traders know that they don't need to win
every trade in order to profit from the market. This is one
characteristic that is hard to understand and really apply. Why?
Because we are taught, since kids, that any number below 70% is
a bad number. In the Forex trading environment, this is not
true.
Don't even consider using a Risk-reward (RR) ratio greater than
1-1. If you use a RR ratio of 1-2 (willing to make twice the
amount risked in one trade) then you only need a system that is
right around 50% to make money. If you use a RR ratio of 1-3
(willing to make three times the amount risked in one trade)
then you will need a system that is right around 40% of the time
to make money. So make sure to use a RR ratio below 1-1.
By applying every point outlined in this Forex training guide,
you will almost assure your failure in your Forex trading
journey. Do the opposite, and you will have the possibility to
achieve what every trader is looking for: consistent profitable
results.
About the author:
Raul Lopez is a full time Forex trader; his trades are based on
a price behavior approach. Raul is also founder of
http://www.straightForex.com a high quality Forex education company.
Written by: Raul Lopez
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