5 Mistakes to Avoid

I know there are countless threads and posts about mistakes, but given that plenty of newbies get attracted to trading around December due to heavy promotions I thought I put my 5 mistakes to avoid as a forex trader here (this is not a complete list and there are many more mistakes to avoid, but personally I think it is a good start):

1. Thinking that trading in a demo account will make a trader out of you.
2. Trading in the wrong account type.
3. Miss-use of stop loss orders.
4. Thinking leverage caused you to blow your account.
5. Ignoring proper risk management

Again, this is my list and recommendation and there are plenty of other mistakes newbies make and should avoid. Feel free to add to them.

 

A demo account won't make a trader out of you, but sure saves a lot of money while learning what buttons to press and working through understanding those other mistakes.

 

Agree with you Rambo. I would like to add , trading without a trading plan which will lead to psychological failure ( greed & fear )

 

The Calendar and the Mouse

What does a trading plan look like? I have certain rules, but a plan...? If I have any plan it is to look back on failed trades and see if I can learn something from them and to regard price as the biggest indicator - the other two indicators being my own eyes and to use them to see if I can get a grip on price action.

I'm not anti-indicator, I'm quite willing to consider any tool that will inform a profitable trade. I'm a tesco trader: every little helps.

For example, an economic calendar - seriously, what does it tell us? What the good ones (a nifty one across at forex razor) tell me is this: price won't go beyond a certain point during high-impact news, so take your foot of the pedal and wait 'til the false breakouts recede. Then consider making your trade.

The early bird catches the worm, but the second mouse gets the cheese.

 

I think if you need a demo account for that purpose than you are in the wrong field anyway, but that is my opinion on it. Twist it either way you want a fact is that most traders will fail regardless of which path they decide to take.

 

You are on the right track then. Good luck

 

Open a real money account when we could not make a profit on a demo account for at least 3 months, is a fatal mistake we have to avoid.

 

Let me know when you jump to a new broker with a totally unfamiliar trading platform and start figuring out all the new features with a $10k live account.

 

This reminds me of when you go to china , learn chinese.really insightful.
Ok lets dig deep.What caused you to blow your account and open this nag thread?

 

Dont call it a plan.Think of it as a floor .If you move the floor too frequently , you gonna fall to the whatever_is_underneath your floor.

Lets say you are using RSI and Support Resistance per say.
your rules are :

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1.No news on the traded pair
2.Mind the events+news calendar for major fundamental shifts in fx in general
3.If 1+2 indicate the path is clear for technicals on this pair then :

• A.pair is moving up ,if resistance is reached and rsi indicates overbought then i short
• B.pair is moving down,if support is reached and rsi indicates oversold then i buy

4.I never move stop losses for reasons other than trailing stop.
5.I Use trailing stop above my first Target after i pocket 3/4 of the lot order.
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Your plan could be "i go long (or very long) when my wife calls me".
Practice sticking to YOUR plan for 20 trades no matter what.
Your plan is your law , you dont break it otherwise you will never be able to test it/understand it fully.