As interesting and easy as forex trading can be, some people are guilty of doing some things that can jeopardise their opportunity to make more money than they could have dreamed. Forex trading is capable of helping anyone regardless of their backgrounds to make some money and most likely, build their fortunes. Sadly not many new forex traders know that there are some things that can ruin their chances of successful, consistent trading. These things when left unchecked, can swiftly cost any newbie his initial investment. This happens because most times, they aren’t warned ahead of time until it is too late to go back. So, if you want to become a successful trader, you need to avoid the following things that most traders are guilty of.
Ask the average or new trader and he’ll tell you that when he’s not trading he feels like he’s missing out on the big action. This is known as addictive trading. People who trade like this continue to trade even when they are losing money. True, forex can be addictive considering the ease with which you can make a fortune, but as with all things, an excess of it is bad. So, as much as possible, do not fall into the trap of addictive trading. Learn to discipline yourself and keep yourself focused.
This is somewhat similar to the first point. The difference however is that unlike the addictive forex trader who wants to be in front of the screen 24/7, the over trader typically logs in and places a trade every day even when he has seen that the market isn’t in such a good state. Many new forex traders are guilty of this and often lose a lot of money in the seasons when the market is unfavourable. Know one thing today, there WILL be days when you should not trade. These days are basically money wormholes. Trading on such days can be risky.
The average forex trader wants to trade with huge leverages because of the profit margin. What they do not consider is the loss margin too. While huge leverages can result in quick wealth, the losses can also wipe you out completely. It is always better to find a middle point so that your losses will not get you out of the game. To be on the safe side, go with safe, manageable leverages. However, if you are sure that there are days or timeframes in which the trades will undoubtedly go in your favour, you can always increase the leverages and cash in on the window of opportunity. However, do not make this a frequent occurrence, otherwise, you will soon join the league of failed forex traders.
These three things seem simple, but when you take a closer look, you will see that they are the cause of over 50% of the reasons many forex traders get wiped out. So, beware and take all precautionary measures.