Monday, November 19, 2007

common mistakes to avoid in forex trading

Forex trading has become very popular in Nigeria and has come to stay whether some acknowledge it or not.people are turning to it daily because of the immense opportunities that it offers and so many people have successfully become their own boss through forex trading.however,not everyone is succeeding in the market,quite a number of people,especially Nigerians are making loss in the market,thus giving credence to the Pareto's principle which states that 80 percent of people in the world don’t succeed while the remaining 20 percent do.

There are so many reasons why people fail in forex trading,but basically I will focus on the common mistakes people make which is often repeated by many to their own detriment.these are the basic reasons why people lose their money in the forex market

#1. GET RICH QUICK MENTALITY

there are adverts awash the Internet and even here in Nigeria promising people millions in the forex market,they are promised $500-$1000 daily,hence the growing mad rush into the market.it is very easy to trade in forex,but difficult to trade well.opening a forex account with www.maketiva.com can take as little as 24 hours and you can start trading.so many people open a trading account,fund it and start trading without knowing exactly what they are doing.most Nigerians approach the market with a voodoo bank mentality which promises them huge returns.you must develop the right mentality of patience and discipline to succeed in the forex market.

#2. IMPROPER EDUCATION

as I wrote earlier,people open trading accounts without been properly educated and equipped with accurate trading techniques and the intricacies involved in the forex market.a good course of study on the currency pairs and how to use them to your own advantage is a must before you start any live trading.you must be educated on the terminologies and trading patterns and techniques involved for at least six months before you even think of opening a broker account or you are bound to loose a lot of money.

#3 TRADING FOR THE WRONG REASONS

Every business has its gains and risks,yes,there is a high feeling associated with making a huge profit from ones trade.however,forex trading is not a betting or gambling program,you should not trade just for the fun of it,a lot of discipline is involved in waiting for the correct trade to come along.don’t start forex trading because you think you can fold your arms and watch money roll into your account,trading demands discipline,hard work and above all patience.spend time trading with a demo account,it is very important.



#4 NOT USING A STOP LOSS

you must have a clear exit strategy before entering a trade.be a disciplined trader,decide how many pips you are looking for and set your stop loss so that you are automatically triggered out of the trade when that many pips are lost

#5 MISUSE 0F STRATEGY

new traders often make the mistake of jumping from one strategy to another without creating a peculiar and unique trading strategy peculiar to their level of information of forex trading.it helps a lot to develop your own personal trading strategy,it pays a lot to avoid these above mentioned ,it is possible to earn good money from forex trading.for more info visit http://www.forexclub.com/

2 comments:

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