There are traps in Forex trading? Yes, actually there are but if you know what they are in advance, chances are you will be able to avoid making these mistakes and falling for something that ends up costing you a valuable lesson. They are probably easier for a newcomer to fall for than someone with more trading experience, but these traps can catch even the more seasoned trader. Do everything in your power to not get sucked in by any of them.
Here are a few to keep on your radar:
1 – Trading Without Practicing
It’s a bit like Christmas morning where Dad opens the big gift you all chipped in for. It’s a piece of electronic equipment that he has always wanted and instead of reading through the instructions first, he plugs it in and cuts off a finger. Trading Forex without practicing and getting the feel for the system, the methods and all the other nifty tools is like Dad on Christmas morning. With free demo accounts at your disposal, you should spend time learning to ropes first.
2 – Excitement Enticement
The Forex market is exciting. It’s a real adrenalin rush for many. However, and particularly for newbies, getting lost in the excitement and drowning in the rush is no way to make intelligent trading moves. Using your emotions as your motivation will do one thing. It will bring about your failure in the market. Don’t let that happen to you.
3 – Riding Solo
It’s tempting to save some cash by doing everything on your own and is not a good idea. You can sign up for several Forex training courses online, join online Forex communities to fill your brain with great advice from those with experience for added support. These are the tools that you can use alone in the comfort of your home and they will allow you to learn at your own pace. However, you will soon discover that you are not alone and that you should never try to be if you require knowledge that will enhance your trading career.
4 – Trading Without Analyzing
Do you walk to work without checking outside first to see if you need a jacket or umbrella? Why would you trade a huge position on currencies without first spending some time researching the market? It’s just plain dumb. It’s not a good play regardless of your skill level. Your success (or failure) is entirely connected to how the market is at the time you make you purchase and when you sell. Taking a guess or making a trade just because it’s still early in the morning is not going to build your account in the way it should be.
Don’t Get Caught In These Traps
The traps mentioned here are easy to avoid. They are not designed to help you and if you intend to become part of the Forex culture and become a winner in any form during your trading career, it is extremely important for you to avoid short cuts and bad habits. Skipping these traps will help you find the path to success.