9 Fatal Mistakes in Forex Trading

Below is a list of nine situations that you should avoid. Any of them can ruin your financial goals and expectations!

1. Trade with the money that you can not afford to lose.

One of the most serious obstacles to successful trading is using money that you really can not afford to lose. An example of this could be money to be used for payment of bills, mortgage, etc. This is sometimes referred to as "trading with scared money" and there is a very serious reason for such a title. Ultimately, it happens that when someone is in the subconscious mind that he is in danger of vital money, he trades on the basis of fear and emotion rather than based on pure logic. If you are in this situation, we strongly recommend that you cease trading until you earn enough money to open an account, you really can not afford to lose, without serious financial problems.

2. The need for "confidence".

All have a need to make sure that the bargain will be good. Therefore, we are looking for signs that will give us a confirmation to enter the market. This may be in the form of fundamental news or waiting for some time to make sure that the market actually went up tool in this direction and this is not a false break. Other traders are awaiting the views of various consultants and analysts. Others will wait for signals from dozens of technical indicators, which will give them a green light.

All this is good to a certain extent, but a big mistake to lose too much time and allow trade to occur without you. Interestingly enough, eventually going on for too long while waiting for - you actually increase your risk. This is because market-based instruments moves further and further and is running out of traders willing to enter into a market and as a result of this marketing tool can not continue to go. This is like a game of musical chairs - in the end someone is left without a chair.

Traders who wait and wait to get more confidence - usually those who bought at the peak and sell at the base. They reproach themselves for choosing the wrong market. It is not in the market, and in timing.

We need to remember that there can be no absolute certainty in any trade. All we can do - it is good to take the risk, together with the expected returns!

3. Spending profits before you earn it.

Nothing is more exciting than the entrance to a winning position, which you find yourself in a very advantageous situation. However, this can lead to serious problems, because this type of trade leads you to the euphoria and led to the dream of huge profits, which do not exist.

The real problem arises when you are completely in your dreams and expectations. You is not ready to go when the market turns and eats up your profit, because you have convinced themselves in the end result and would deny the reality of the situation.

A simple remedy for this is that you need to know when the take profit as soon as the enter the market. Understand also that the market move as far as he wants, not how you want.

4. The formation of opinions.

Here we must say that the market was not interested in either you or your opinion. Even if it is based on a thorough analysis or prediction of authoritative analysts, it does not matter!

5. Three words that will kill you: HOPE, the desire to please!

If you ever do any of the above, being in the market - meaning you have a big problem! As mentioned above, the market you do not care. All the hopes, wishes and requests of the world does not turn a losing position in the winning.

When you are wrong, there is only one simple word to correct the situation - closes!

6. Do not follow your plan

Great source of trouble arises when a trader starts to deviate from its strategy. Maybe one week, the trader will trade under one set of rules, but on the next use something completely different.

This projection from one method to another always ends bad. Because the trader can never be sure what works and what does not.

You must never deviate from their methodology, once started. While it is supported by good statistics, there is absolutely no reason to change it. The way to make money on this technique is to sell it many times, using the advantage that it gives you.

One point that needs to know - a trader is most vulnerable to any change in methodology on the methodology, after small losses. Therefore, be especially careful in this period.

7. Not knowing how to withdraw from unprofitable deals.

It is surprising how many traders do not have any clear plan for withdrawal from a bad deal. They hope to ask for, and willing to rationalize their position. Once again - the market does not care what you think. He does what he is doing and where you are wrong, then you are wrong!

The easiest way to prevent bad position even worse is that even before the entrance to the market to determine where you will go. You can use the cash value to limit losses, or some target point such as a minimum the previous bar.

8. The existence of grand.

Most people begin to trade, which have been extremely successful in other areas. For this reason, they have high self-confidence that they can not fail. Their conceit is their misfortune, because they could not admit that they were wrong and did not renounce bad positions.

Once again, whoever you are and wherever you do not have is irrelevant to the market. All the charm and ability to persuade, the number of diplomas on the wall is not the market shifts from the place where you are wrong.

9. "Fall in love" in a market instrument or transaction.

To give you an example for clarification. In spring of 1999. "EFAX" was really hot action. I waited to buy it at lower and did it for 19 $ / share. She began to move steadily and life was beautiful!

After a while, but it began to return to my point of entry, and then lower it. There was a problem. For some reason I liked the company "EFAX" and I continued to keep it. Ultimately, I could not abandon it even though I knew that I should. I justified and rationalized why my "dear friend" to come to normal, but he did not do. Finally, I was forced to interrupt my love, when the campaign has reached $ 9. (Oops!)

The moral of this story is to never "fall in love, not to mention the fact that he marries at some market-based instruments. This can cost you dearly!

Dr. Jeffrey Vayld
daytradingcoach.com