subject: Forex trading- nine myths about trading [print this page] Forex trading- nine myths about trading Forex trading- nine myths about trading
Learn forex trading the smart way and avoid these common myths and you can always be profitable no matter what the market is doing.
You should always be in a trade.
Don't just trade for the sake of it. This is a common mistake and often leads to more harm than good. Don't look for a trade that does not exist, only trade when all variables have been checked, analysised and you have good sound reason to trade. Don't get caught up in the market movements. Use your knowledge, research and thoughts before trading. Remember the market does not reward you for the number of times you trade just the number of times you have won! So be selective in your trades. Always aim to protect and grow. It is better to come back next week than be wiped out by next week. Constant trading shows lack of discipline and no thought out action plan to use or fall back on. Remember don't just trade for the sake of it, trade from a well though place and you will win more times than you lose on the market
2.You can make money on every trade.
You will lose on some trades. This is actually a good thing because it shows you are learning from your experience, no matter how painful it feels. The goal is to keep your losses minimal and your profits maximum. A small loss can be seen as a victory against a huge loss, this is the sort of mindset you need to create to become a great forex trader. Create a mindset and understanding that sometimes you lose, close the position and limit the damage just like a forex master would. You'll be back tomorrow, a better trader
3.You can copy someone else's system blindly.
This is a big myth. There are a lot of different courses, books, seminars and teachers out there in the forex world. You need to learn from them but more importantly you need to establish your own relationship with the FX markets. You need to learn from your own actual experience and not just sometime else's theory. Nobody as a perfect system but you can learn from what they do have but don't just follow every idea blindly. Consider every forex theory with careful thought. Why does it work? Will it work all the time? Will it work in one year, three years or five years? What are its strengths? What are its weaknesses? Learn from systems and ideas don't just follow them blindly..
4.You don't need a plan.
Making money is the goal. Forex is the plan to do it. You plan is your blueprint or bible. Did you know that 95% of new traders quit within one year because they didn't have a blueprint or plan. Take the time to put together a plan. How much money would you like to earn from trading each month? Break it down to per week and per day if necessary. Then what actions are you going to have to take to get to this level. Your plan will also keep you focussed when you have some inevitable losses.
5.The more currencies you trade, the more profitable you will be.
Not true. The reason being the more you specialise in a currency pair, you more of an expert you will naturally become. Diversify in forex probably means more risk, speciality in one currency pair means less risk. My advise is to specialise in one currency pair understand its dynamics, its relationship to each other and recognise its habits and patterns. The better you become at this process, the easier for you to become profitable. What you need to be doing is to be looking for your specialised currency pairings and when you spot a trade, trade it. Trade it hard because you should have a lot of confidence in this trade because of your specialised knowledge of the pairing
6.Find the pattern, find the gold..
It not all about patterns, charts, fibonacci, triangles, triple bottoms, wedge etc etc etc. The important thing to remember is that the maths and science do not always work in the forex market. The reason being is that the market does not always follow science or law. Outside and external factors can influence the market at any given moment and sometimes the market does things that even the experts have difficulty explaining! The most important thing to remember is that science is just a theory, use it in your overall research but not as a be all and end all. Analysis all factors not just the science and maths. If a trade went wrong, find out why and make sure it doesn't happen again.
7.The rumours make you rich.
With some information online thesedays you could get information overload. There are so many forums, websites, sales products, information products, teachers/mentors and classes. If you blindly follow their advice it will cost you money countless times and may not lead to success. The best thing to do is listen to all advice out there and then use your own judgement. It is actually quite important to seek advice espically from good, strong credible sources. Always remember to use your own judgement in the final decision though. Uses hints and rumours to alert you and allow you to further investigate a great trade. Keep a record of where the good advice is coming from, you may need it again at a later date.
8.If you stick with a trade long enough, it will eventually turn around!
What you will find is that a losing trade rarely turns around. Cut your losses while you can. Learn from your experience and move on. Another vital piece of advice is after you cut your losses, shut your operating platform and walk away for at least 10 minutes. If you do not do this what you will find is that you will be tempted to trade a silly trade. Your emotions will try to get you to cover your losses. Big mistake. Walk away while you can. Great traders and forex masters all make mistakes, its just that they become smaller in number. Mistakes and losses are a vital part of the learning curve into becoming a master trader.
9.Never give up, ever.
You will have a bad day, a bad week or even a bad month. However, what defines great people and great traders is their persistence and will to win. They will keep playing the game until they conquer it or die trying. You wont die trying, you just have to take the rough with the smooth. Never give up. Learn to trader forex like a champion. The way to do this is to learn (from mentors, books and courses), apply what you have learned and persist until have a formula or understanding that gives an excellent ratio of results each month. Learn forex trading well and enjoy the journey.
