Beginners Forex Education Forex Basics

7 Horrible Mistakes You’re Making With Forex Trading

If we are going to be completely honest, we all make mistakes and when it comes to trading, we have made many, and we are sure that you have too. Some of them are not too bad, some of them though, are pretty horrible and have thrown off our trading quite a bit. If you look back, we are sure that there are some mistakes that you have made in the past, especially when just starting out that you are most likely not too proud of. We are going to be looking at some of the horrible mistakes that we have made and that other trades have made during their forex trading careers.

Spending Too Much Time Trading

One that you probably would not expect to see, but spending too much time can be just as bad as spending not enough. The majority of traders have other things in their life too, maybe a job, maybe a daily, anything else that gives you some form of responsibility. What you do not want to do is to use every minute that you have spare, or even to take away from the other things in your life. This can lead to a lot of problems, we have known traders to lose their job or to lose their families just from spending too much time on their trading. Do not let this happen to you, make sure that you divide your time up between the things that are important and don’t let trading take over.

Continuing to Trade a Losing Strategy

A lot of traders have a lot of pride, they like to think that they are correct, while it is good to be proud of what you do, it is not good to let that pride cloud your judgment. If you are trading a strategy that is losing, why would you want to continue doing it? Maybe you believe that it will eventually work, maybe you blame the markets, but one thing is for sure, these traders do not want to admit that maybe their strategy just doesn’t work at the moment. If something is not working, work out why and make changes, do not keep trying to force it to work or trading and waiting, you will only end up losing money, so you need to admit when something isn’t working and then make a change.

Trading Without Stop Losses

This one is common amongst both new traders and experienced ones and it has the same effects on the accounts of the traders and that is that they will eventually blow. Stop losses are one of the first and most simple forms of risk management that you should learn about and certainly use. The stop loss is there to protect your account, it will automatically close the trade when it reaches a certain level, yes it will lose in a negative, but it will be protecting your account. It also allows you to properly implement your risk to reward ratio. Ensure that you are using stop losses with every trade, every single trade, and your account will be a lot safer, without one, a single trade can blow even the largest of accounts.

Trading with More Than You Can Afford

One of the things that you will always be told is that you should never trade with more than you can afford to lose, what this means is that if the money that you are using is needed for something else, like bills, rent, or food, then you should not be using it. As soon as you use this money you are basically saying that you may not be able to pay the rent this month, not a situation that you want to be in. Even worse are the people who are borrowing money, getting a loan just for the purpose of trading it. This is not something that you want to do, do not put yourself into debt just to be able to trade. You should only trade what you can afford to lose, money that won’t affect your life if you lose it. Not only does it help protect your finances and life, but it also helps you to reduce the levels of stress that would come with potentially losing money that you need.

Trading It All

Emotions can have a huge effect on our trading, especially when we come across losses. When we experience those losses, we sometimes want to win it back, we do this by placing larger trades, or more trades that are not in line with our strategy for risk management. This is not something that you want to do and it is known as chasing your losses. You place larger trades in order to try and win the money back, but what happens when that trade also loses? You will end up placing an even larger one, then larger until eventually you cannot afford to make any others and you have pretty much blown your account. Avoid doing this, it is not smart and lots of people have actually gone bankrupt trying it.

Guessing the News

News events can be very lucrative, you can make a lot of money from them if you get things right, especially things like the Non-Farm Payroll announcements. The problem is that if you get it wrong, you can lose a lot of money. What some people try to do is to guess the direction that the news will make the markets move, this is never a good idea. The news can be unpredictable, the markets also do not always move in the direction that the news suggests it should. With news events the markets can jump quite a lot, so even with stop losses in place the markets can actually jump past them and you can end up losing more than you expected. Avoid trading the news unless you really know what it is that you are doing, it is far safer to avoid it than to guess at it.

Trading Without a Plan

This one is more relevant to those that are just starting out in their trading careers. Trading without a plan basically means that you are placing trades without any reason, this is the part of trading that could best be compared to simple gambling. You need to use a plan, otherwise, ask yourself why you are placing the trade that you are. If you cannot answer it properly, with analysis and things like that, or you just simply say because you think it will win, then you should not be placing it. Do not place trades without a plan, at any time in your trading career.

Those are some of the horrible mistakes that you and a lot of other people may be making. They can have a real negative effect on your trading or your life as a whole, try and avoid doing them at all costs. If you are currently doing one and can recognize that, then see what you can do to help yourself get out of doing it, you will see some huge improvements to your trading results and even possibly your personal life too.

Forex Basics

These Mistakes Will Keep You From Succeeding at Forex

Mistakes happen, we all do them and we make mistakes when we do pretty much anything in life, even things that we have been doing for years and years. So it is obvious that we will also make mistakes when it comes to our trading, that is always going to happen, what is important though is how we earn from them and how we develop after making those mistakes. Some are pretty minor and don’t have a huge effect, some may even benefit us if we are lucky, but some mistakes will hold us back, they will prevent us from being successful and profitable and if we continue to make them, we will consistently lose out and won’t be able to become a successful trader. It is those mistakes that we will be looking at in this article, mistakes that many traders do that can hold their forex trading success back.

Taking Shortcuts

It can be very easy to fall into the trap of taking shortcuts, when we say shortcuts we are referring to the rules and the methods that you use to place trades, your trading plan will have some rules on it, these rules will dictate how and when you place your trades. These can be pretty small shortcuts, like not waiting for additional confirmation, or they can be pretty significant ones like trying to speed up the process by not placing a stop loss with a trade. While they may not seem big, those little things like not placing a stop loss could potentially end up causing some quite considerable losses which will, in turn, put your overall trading results back quite a bit. It is important that you try to avoid these shortcuts, some may work, but when they don’t they can have big effects. Ensure that you stick to your rules and that you do them fully, not doing just half and hoping things are ok, that extra minute that you save is not worth the additional risks involved.

Not Following A Plan

The plan is there for a reason, it is called a plan because it is what you are meant to be following. Yet we see so many people look at their plan and then only follow a few of the things on it. Trading plans should be pretty diverse, they will include the rules for placing trades as well as the risk management plans that are there to help protect our account. Due to this, it is important that you follow them, as soon as you deviate you are placing bad trades and you are reducing the effectiveness and the consistency of your trading. If you have a plan you need to stick to it. The more that you go against it, the more losses and larger effects those losses will have on your account. Stick to your plan at all times.

Increasing Risks

A lot of people don’t seem to stick to their risk management plans, at least not entirely. Your plan will have your risk to reward ratio which will dictate things like your stop loss distance. It will also include things like the trade sizes that you should be using as well as the frequency of your trades. Yet so many go against this, the normal reasons for going against it and increasing things like trade sizes and frequency are a recent loss that they want to win back or overconfidence, things are going very well and so they believe that they can predict the markets. If you ever feel like this, then take a step back, take a break and then come back when these sorts of emotions are not with you. Stick to your risk management plan, you set it up for a reason, it works, so every time you break it you are risking money and potentially your entire account.

Trading Tired

Something that we are all probably guilty of, we love to trade, but sometimes it is better not to and when you are tired, that can be one of those reasons. When we are tired we do not have the same concentration levels, we are far more easily distracted and we are far more likely to make mistakes. Yet we love trading so much or feel that we need to trade that sometimes it doesn’t matter how tired we are, we will still trade. This is where a lot of mistakes will be made, things missed out and potential losses gained. If you’re feeling tired, or that you cannot concentrate fully, then you should try and avoid trading as a whole, including analysing the markets and especially placing any trade.

Being Distracted

Distractions are horrible things when it comes to trading, pretty much anything can be a distraction. When you set up your trading officer room, you should have ensured that a lot of the things that could cause you distractions were removed. Things like a TV, games consoles, things like hats, things that can take your attention away from your trading. Ensure that others know that you are trading and that you do not wish to be disturbed. Distractions can very easily cause you to miss things or to place trades incorrectly, so it is vital that you eliminate as many as you can.

Trading With Emotions

Emotions are wonderful things, they can make us feel amazing but at the same time, they can make us feel pretty rotten. One thing that we want to avoid is trading while our emotions are pretty high. They can cause us to want to do things that go against our trading strategy, things like greed and overconfidence can make us trade large or more often, while things like anxiety and fear can make us not want to trade at all. When we have our emotions high or you can feel something building up then it is important that you take a break, step away, clear your mind and come back when those emotions have died down.

Those are just some of the mistakes that people make when they are trading, some of them may seem pretty small but the consequences that they can have can be pretty big. If you are in any situation, then take a step back and see what you can do to try and rectify things. It’s not the end of the world but what is important is that you are able to recognise them and then do what you can to rectify them.

Forex Psychology

Top 10 Forex Trading Psychological Mistakes

It is said that the personal psychological challenge constitutes 90% of the struggle to achieve consistent success as a forex trader. Can it be true? Yes and no. Many great traders who have written about their experiences have recognized how their own inner psychological struggles have caused them heavy losses, even when they “knew” they were doing it wrong. There can be no doubt that the psychological factors are of great importance in the game of Forex or when speculating in any market.

Mastering your negotiating psychology isn’t going to offer you money by itself but, if you’re not aware of the tricks your own head is trying to reproduce, you are very likely to be losing even if you are a good trader and have been successful in your trading decisions. There are hundreds of ways a trader can sabotage himself. There is a “physical” aspect to trading.

We want you to find it useful in your journey as a trader to be aware of the various psychological traps that traders usually fall into. Sometimes you have to experience something for yourself to learn from it: nothing teaches us better than direct experience. We want some of these points to give you a new understanding of the trading errors you have already made or warn you beforehand of mistakes you have not yet made. Make the effort not to blame yourself when you make a mistake while operating: get your “revenge” by learning the lesson and not by making the same mistake.

#1 – Not Believing In Your Methods

It is surprising how many people operate in the markets without being convinced that they can make money or at least make sure that they have a good chance to do so. Even if you think you believe in what you’re doing, are you sure you don’t have big doubts under that surface? The answer to this problem is to prove its methodology. For example, if you follow trends, take time to review much historical data. Does it show profitable results most of the time? It’s based on a solid concept, like a reversion to mean or impulse? If the answer to all these questions is yes, you should be sure of what you are doing and not forget that you believe in it.

#2 – Not Having a Plan and Sticking To It

This sounds very obvious. It’s not just about having a plan, it’s about having several plans and leaving some flexibility. For example, if you are doing day trading, you must have a method to decide in each session which currency pair or pairs to trade. But, if the pair that choose goes nowhere, while another pair shoots up, you may want to reconsider your decision rather than just “stick with the plan”, for example, allowing you the option to modify your opinion hourly. It is a “plan”, but a plan may also include some structured flexibility.

#3 – Not Knowing the Difference Between Planning and Living

It’s pretty easy to make a plan that works on paper, but living that plan in real-time can be something completely different. A good example is to make a plan to do hundreds of trades in a year or so and expect your account to suffer a 20% reduction as it suffers a streak of 20 consecutive trades with losses. You can make the review in a day or two and decide if such losses are acceptable. You will probably feel very different when you spend weeks or even months losing real money over and over while your balance shrinks. There is no optimal answer to this dilemma, just keep in mind that spending months of time in an hour or so is not necessarily a good psychological practice for bad negotiating times.

#4 – Being Afraid Of Placing A Position

These are the opposite sides of the same problem. The best way to overcome this is to tell yourself every day that you are willing to place several positions in one day or none at all, and that what you do will depend entirely on the market situation rather than the condition of your wallet or your mood. There will be days without action and days with lots of action. You have to adapt to the circumstances.

#5 – Making “Agreements” with the Market

Tell yourself that, if the price goes up another 10 pips or if it doesn’t go up in the next hour, you will close the position. This is simply your mind subjected to your anxiety. Ignore it, stand firm, and just step out of positions according to your plan.

#6 – Being Too Anxious To Take Profit

You see a benefit on the table and think how nice it would be to take it and stop operating that day, thus missing what could be a more profitable day. This is laziness and self-indulgence and must be controlled. The only reason to take profit must be that you have a real reason to believe that you will probably not go much further in the desired direction. Let the market point it out, not anticipate it.

#7 – Protecting Yourself From Losses

This is really the same as an appetite for profit. You may need to rethink your risk management strategy.

#8 – Letting Positions With Losses Run

There is a simple way to avoid this: always use a strict stop-loss and do not constantly expand it.

#9 – Not Taking Responsibility for Your Trading

It’s very easy to make excuses. If I hadn’t missed the bus/been distracted/in a bad mood then I would have handled the position better and made money instead of losing it. It’s your duty to make sure that that you do not miss the bus or get distracted or be in a bad mood. Once you take responsibility for your trading activity, your mood can improve as you see that there’s a way to make things better. It’s a marathon, not a sprint.

#10 – Endless Search of the “Holy Grail”

You test and design a strategy that offers an average of 20% profit per year. But wait! Try something else to earn even more, say 25%. Is there anything better out there? Maybe, but this process of searching and testing can take a long time. Consider this: If you spend 6 months testing instead of operating in a committed way to find a way to earn 25% instead of 20%, you will simply lose 10% and it will take you another year to make up for it. Keep searching by all means, but don’t let that affect your trading. Even if you have a pretty solid methodology, it doesn’t have to be perfect!

Forex Basics

Faux Pas That Are Actually Okay to Make With Your Trading

Much like anything in life, trading offers a lot of variety and so there are a lot of different people doing a lot of different things, meaning that we all have different experiences and abilities. Due to this, there are a lot of things that can be considered a faux pas. Things that traders will look back at as embarrassing, things that they probably would like no one to remember, but these things happen and they happen to all of us. The thing is that a lot of them are actually okay to make, regardless of what others may think. They could potentially benefit you and your trading or at least not have the negative effect that some people may presume. So let’s look at some of the faux pas in trading that are actually ok to make.

Blowing An Account

Let’s be honest, the worst thing that can happen to you as a trader is to have your account blow. Many people believe that this means that you are a bad trader, you do not know how to use proper risk management, you do not know how to trade or you are just bad at it. This is completely untrue. In fact, if you look at any successful trader today, we can almost guarantee that the majority of them would have blown their accounts at some point. The question is though, do you think that they are embarrassed by it? Most likely not.

This is simply due to the reason that it is something that nearly everyone will do, those that do not blow accounts simply have not traded for long enough. It will happen, it’s inevitable and it will most likely happen near the start. It can feel embarrassing but it really shouldn’t be. Instead, the blown account should act as a fantastic learning opportunity. They allow you to see exactly what you did wrong and what you can do to help prevent doing anything similar in the future. There is nothing wrong with a blown account (apart from the lost money) and it certainly does not mean that you are a bad trader. Use them. Learn from them and you will most likely not blow another one in the future and you will end up as a much safer trader in the long run.

Not Understanding Something, or Anything

Forex and trading as a whole can be incredibly complicated. There is so much information out there, far too much for any one person to even think about learning all of. In fact, you probably won’t ever learn more than 2% or 3% of what is out there. Due to this, you should never feel embarrassed that you do not understand something or in fact not understanding anything. We have all been in that situation, especially when we first started out as traders. We didn’t know a thing, everything that we read or watched was confusing, all these new words and meanings that we had never heard before.

So you should not feel embarrassed. Everyone has been in the exact same situation. Instead, you should ask what things mean, you should ask how to do things and you should question things that you do not understand. No one will hold this against you, in fact, the trading community is more often than not a very helpful one. People will be willing to help you to understand, they will explain things and help you to understand. Just know that absolutely every trader has been in the same situation and even those at the top of the game will still come across things that they do not understand, they are not embarrassed by that, and neither should you be.

Becoming Stressed

Stress can get the better of a lot of us. It is an emotion that the majority of traders will go through and is completely natural. If you are feeling stressed, do not try and keep it inside. Instead, you need to take action against it, you need to step away and you need to take breaks. Do not feel bad that you are needing to step away from the terminal because you are feeling a little stressed. We all have to do it at some point as do the world’s best traders. They take breaks because things are getting too tense and so should you.

Forgetting Stop Losses

Stop losses are vital for anyone to be trading in a safe way, but when you do something with every single trade. There will of course be times where you may forget to place them, and of course, the time that you forget is the time where the markets go against you and you lose a much larger chunk of your balance than you were planning for. It happens, you know you should be using them and so you feel embarrassed that you lost a lot more simply because you forgot to place it. Do not worry, use that as a learning experience and as you feel bad about it, it is much less likely that you will do something the same again. You need to learn from this mistake, we still do it from time to time. But each time we do it, there is a long period of time where we never forget to place it. Simply because we are remembering the losses that we took before. So do not feel embarrassed that you forgot the stop loss, just use that feeling as a reminder so you do not forget again in the future.

Not Having Enough Money to Trade

Trading can be expensive. It takes money to make money. At times in our lives, other things may come up, a broken boiler, a broken car or a wedding. These things cost money, and you may need to take money out of or even all of the money out of your account in order to pay for these things. Now you have no money to trade, that is fine. The other parts of your life are more important at that point in time, and the forex markets are not going anywhere. If you need to use your trading funds for things then use them. In the future, when you get more money again you can start to trade again. Do not make your life suffer just because you don’t want to be in a position where you cannot trade.

Those are some of the things that people find embarrassing about their trading or the things that they have done. It is important to remember that these things should not embarrass you. We all go through them and millions of people will go through them in the future too. Use them as learning opportunities or simply talk to others, you will discover just how common they actually are.

Forex Basics

The Seven Deadly Sins of the Forex Trader

Most of us have heard of the biblical seven deadly sins, but few know about the seven deadly sins of Forex. Part of achieving success is knowing what not to do, and these “sins” work to help you understand and avoid potential problems. Without further adieu, let’s get into it!


Wow! What a great trading session! There is no one to stop me! Tomorrow I will double my profits! 

Little grasshopper, you’ve had a good day, and yes, you got your positions right, enjoy your joy in moderation, and share with others the reason for those entries, and be aware that tomorrow that euphoria may cloud your vision today. Remember also that the one who calls himself a donkey and who today is crying out, perhaps it will be the genius tomorrow and you will be the one crying out.


I’ve achieved my goals, and this looks like it’s going to turn, but there’s another target up there pending, so I’m going to continue with all my positions without partial withdrawal because I’ll gain a lot more.

Small grasshopper, already assures part of your profits, reduces risk situation and leverage, in this way, perhaps you will find opportunity in another market that you can take advantage of.


Well, I’ve already won a TrADE today, and although this one I’m looking at now is very clear, I’m going to stOP. tomorrow will be another day.

Little grasshopper, if this new operation is clear, do it! And do it now!, do not leave for tomorrow what you can do today, but not simply by following the proverbs, but because tomorrow may not present you any clear opportunity in the market, And maybe you’ll force an entry of dubious signal, causing you losses in the end.


Today I will catch all of the price movements. Not one will escape me! Today I will recover everything that I’VE lost RECENTLY.

Little grasshopper, that’s called overtrading. It’s not advisable, you’re gonna get obfuscated. You’re gonna spiral into wanting to put a pulse on the market, and this one’s a lot stronger than you.


Wow! Look at this guy with the big profits. It’s just dumb luck. He has no real idea of how to trade Forex

Little grasshopper, congratulate him and share his joy, get in touch with him, maybe there’s something he can teach you. Keep in mind that trading is not only about skills but also about attitudes.


look how good that XD directive is! Go all out! I would hit with it XD. Wow, look how good that XD support is! Go all out! I would hit with it XD. (This is a joke, By THE WAY!)

More seriously, after a good run, your worst enemies will be overconfidence and self-confidence that can be lethal in trading, as well as excessive leverage. Minimal risk control and uncontrolled GM management can lead to failure.


they’ll be cursed! They’ve got me going in all directions. I don’t know where to turn any more! And look how stupid they all are, everyone buying! Do you not see that this has to fall?

Little grasshopper, don’t fight the market, the market must be your friend, listen to him, understand him and everything will go smoothly, be receptive, get in tune with him, and don’t get angry. It won’t lead to anything positive, you’ll only aggravate your lack of control. Enjoy trading. And don’t marry any position, after all, they don’t want you forever either.
Beginners Forex Education Forex Basics

Top 7 Biggest and Most Embarrassing Forex Blunders

When it comes to forex trading, there are a few factors that can make or break your career. Beginners are very prone to making these mistakes, but even intermediate level traders are susceptible to some of the biggest forex blunders out there. If you’re looking to increase your profit margin while dodging unavoidable mistakes, keep reading. 

Forex Blunder #1: Blindly Trading

When we say refer to blind trading, we mean trading without the proper knowledge needed to make informed decisions. This could stem from opening a trading account too soon without learning all of the components that actually go into trading or failing to keep up with important news and other factors that can affect the forex market. Traders that don’t know what’s happening with the forex market are bound to feel confused and fall behind their colleagues that keep up with world events. Fortunately, you can avoid this mistake by ensuring that you have a proper education and by keeping up with forex news through an economic calendar and other means of acquiring that important information. 

Forex Blunder #2: Risking too Much

From the beginning, forex traders need to work out how much money they can afford to invest in their trading account. From there, it’s crucial to manage that money by deciding how much you are willing to risk on each individual trade and by taking measures to limit your risk, like placing a stop loss. One of the biggest mistakes you can make involves using high leverage amounts, failing to use risk management precautions, and simply risking too much money on each trade. Together, these mistakes can blow through your account balance and leave you feeling defeated, which might even cause you to give up on trading for good. One simple tip is to stick with an average leverage (many experts use a 1:100 ratio) and to risk about 1% of your account balance on each trade. 

Forex Blunder #3: Emotional Trading

Forex trading is often compared to a rollercoaster ride because of the range of emotions that traders can go through. Feelings of anger, frustration, doubt of one’s ability to be a good trader, and panic over the loss of funds are common, especially with traders that don’t have a lot of experience. This leads to irrational decisions and issues like revenge trading, which involves risking too much in an attempt to gain back funds that were lost quickly. Since traders are already feeling the adrenaline and aren’t thinking clearly, these types of measures usually end with even more losses. If this sounds familiar, some of the best tips are to lower the amount you’re risking on each trade so that losses won’t have as much of an impact on you, stick with your trading plan, and take a break when you need to calm down. 

Forex Blunder #4: Choosing the Wrong Broker

There is an overwhelming number of forex brokers out there, each of which offers its own unique conditions and perks. Some traders might not realize just how much goes into choosing a broker, as you need to compare account types, funding methods and fees, leverage options, tradable assets, and more. If you choose the first broker that pops up on your search engine, there’s a good chance that you could have found an option that was better suited for your needs with a little research. It’s also important to know that your choice affects the amount of your profits that wind up in your pocket at the end of the day once broker and withdrawal fees are subtracted.  

Forex Blunder #5: Not Having a Trading Plan

What types of instruments will you trade? How much money will you risk? What type of evidence are you looking for before you enter a trade? At what point do you plan to exit trades? All of these questions and more are addressed in a trading plan. Without one, you’re essentially just making random moves and trading all over the place. Even if you make money with some of these random trades, your history will be so inconsistent that it will be impossible to pin down what is causing you to win or lose money. Meanwhile, trading with an organized plan helps you to know exactly what you’re looking for and you will be able to figure out what is and isn’t working much more easily. 

Forex Blunder #6: No Trading Journal

We mentioned that you might need to review your trading plan at some point in the event that you start losing money or whenever you’re looking to increase your profits. The best way to do this is by keeping a trading journal where you detail each trade you make, why you entered the trade when you did, how much money you made or lost, and etc. Whenever you need to go back and check on something, your journal will serve as a map that shows how well your plan is working, point out issues, and show you what you should keep doing the same. Unfortunately, many beginners never start a journal at all and feel lost when they start losing money because they can’t figure out the problem. Others might start a journal and abandon it after a few entries because they don’t realize how helpful it can be. 

Forex Blunder #7: Setting Unrealistic Goals

When you first opened your trading account, you probably had an idea of how much money you wanted to make. Traders that set realistic goals and accomplish them feel a huge sense of satisfaction, however, having the opposite experience only sets traders up for disappointment. When it comes to trading goals, this is why it is important to have a realistic outlook based on your experience and the amount of money you’ve invested. Rather than focusing on the exact amount of money you want to make in a period of time, you can set short-term and long-term goals that focus on improving your abilities as a trader. You’ll see an increase in profits in return, and you’ll also avoid beating yourself up because you couldn’t meet the unreachable expectations you placed on yourself.

Beginners Forex Education Forex Basics

Top 10 Errors Made By Forex Newbies

In this article, we present 10 errors of the beginner trader that are repeated more frequently. These mistakes are actually made by any trader, from beginners to veterans. It doesn’t matter how long you have on the market; from time to time you will experience lapses of indiscipline, either because of extreme market conditions or because of emotional factors. It is vital to recognize and understand these situations in order to be successful in trading.

1. Cutting Profits, Letting Losses Grow

Usually, the most repetitive error when investing in currencies is to hold lost positions too long and close winning positions early (usually out of fear). Even with a larger record of winning positions, the losers, though less, will represent a larger amount of money.

The best thing we can do to limit losses is to follow a business plan that considers the risks and always use a stop-loss. Normally no one will be right all the time. It is best to accept that having some losses is part of the day-to-day, the more time it will take to refocus and get winning operations.

2. Operating without a Plan

Opening a position without having a concrete action plan is reckless, and the market will surely take our money. If the price moves against us and you don’t have a plan, you won’t know for sure when to cut the losses. If the price moves in our favor, neither will know when to collect the winnings. Making these decisions in the heat of open positions is a good invitation to disaster. Trading with a plan is perhaps the most important step a Forex trader can take, as it tries to largely eliminate the emotional part when it comes to making trading decisions.

3. Operating without a Stop-Loss

Operating without a stop-loss is also a recipe for disaster. That’s how a small, manageable loss can end up blowing up an entire account. Using a stop-loss is a vital part of a well-crafted plan that has specific and realistic expectations, based on prior analysis and research. Stop-loss indicates when a given strategy is invalidated.

4. Move a Stop-Loss

Moving the stop-loss to avoid being taken out of position is almost the same as investing without a stop-loss at all. It indicates a lack of vital discipline, which will unequivocally result in losses in most cases.

The exception to the rule that allows you to move a stop-loss, is when it is done in the winning direction, to consolidate profits that are being recorded in the position. Never move the stop-loss in the losing direction.

5. About-Invest

There are two forms of over-investment.

– Investing too often in the market: Investing too often suggests that something is always happening in the market and that you always know what is happening. If you have open positions constantly, It is also usually exposed to financial market risks. It is much better to focus on looking for good and strong opportunities, where the risk is minimal, and where a well-developed plan and strategy can be implemented.

– Holding many open positions simultaneously: Having too many open positions at once is an indication that you probably don’t have a good business plan and many of them are opening up instinctively without control. Many open positions also affect the margin available, making it more difficult to maneuver in difficult market situations.

6. Over-Leverage

Over-leverage refers to holding very large positions with respect to the margin available. Even a small market movement can be catastrophic in a very large position for the margin available. This common error is made more tempting by the generous levels of leverage offered by online brokers. If a broker offers leverage of 1:100, 1:200 or even 1:500, this does not mean that they should be used. Do not base your positions on the maximum leverage available. Positions must be based on factors specific to the operation, such as proximity to specific technical levels or confidence in any specific signal to open a position.

7. Not Adapting to Changing Market Conditions

Market conditions are always changing, which means that the strategies to be used must be flexible. The current market situation should always be analysed using technical analysis to determine whether it is fluctuating or trending. Likewise, the use of technical indicators must be flexible. No indicator works well all the time. Different indicators and strategies should be used depending on market conditions. Some indicators work well in fluctuating markets, while others work better in markets with more pronounced trends.

8. Do Not Be Aware of Important News and Events

Even for traders who rely exclusively on Technical Analysis for their operations, it is essential to be aware of the main news and events of the market. If at some point certain indicators are indicating the existence of a very good opportunity to open a transaction, but in half an hour a piece of important news that can move the market in a significant way. It would be unwise and very dangerous to open that operation. These types of situations can occur if you are not aware of events and news. Always keep the economic calendar at hand and identify those events of major importance that can affect your open positions.

9. Investing in the Defensive

No trader wins all the time. Some of the best traders even lose more times than they earn. But when they lose, they lose little. After a series of losses, it is better to wait a while for the market situation to stabilize and refocus on new opportunities. One should avoid falling into the mistake of investing in the defensive and try to recover or avenge the losses.

10. Having Unrealistic Expectations

No one is going to retire with the result of a single operation. The key is to make profits as experience is gained. You have to be flexible and manage to adapt to market conditions. It is a bad idea to have in the beginning goals about how much money you will earn. With expectations about specific quantities, and being in a position where those expectations have not been met, it is very common to fall into the temptation of opening larger operations to achieve the goal. Finally, the result is usually a greater loss.

Forex Basics

Avoid These Mistakes that Will Completely Blow Your First Broker Deposit

Let’s be honest. The majority of us have probably blown our first trading account. The majority of us have probably blown our second account, too. The majority of traders will lose their first deposit or at least a part of it. But why is this? What are they doing that causes them to lose pretty much their entire balance? There are plenty of reasons why this happens, each one will be different depending on the trades in question, but we are going to be looking at some of the common reasons as to why traders end up blowing their initial deposits with their broker.

Trading Without a Plan

Your trading plan should be the first thing that you create, yet so many people do not do it before they start trading. Either they have come into trading with the idea that it is easy, and all they have to do is predict the movement and they will be rich, so they don’t need this plan. These sorts of people come from the thousands of adverts that you see out the promising high returns which simply are not real. Then there are those that know what they need to do but are simply too lazy to do it. These people don’t bother with the plan either and instead go the lazy route of guessing where the markets will go, or simply copying what others are doing. Either way, both of these people will end up losing their accounts, simply because they do not understand what it is that they are doing properly, a recipe for disaster whatever you are doing.

Lack of Education

A lack of education is another killer of accounts. There is a lot to learn when it comes to forex and trading, too much for any one person to learn. However, there are certain things that you need to learn before you start trading. If you do not then you will be bound for losses. You need to learn some of the basic terminology, different order types, and also things like risk management which will allow you to protect your account and your capital within that account. If you do not learn even the basics then you will be guessing and you will be making mistakes. Mistakes that will cost you money. You do not need to learn the world, you do not need to know what an expert does, but you need to know what you’re doing, why you are doing it, and how you can protect yourself from losses.


Gambling, something best left for the bookies, yet it is something that a lot of people come into trading and do. People gamble for a number of reasons, for the thrill of it, due to not fully understanding what they are trading, being lazy, or simply wanting more easy money. Whatever the reason behind why they are gambling is, it doesn’t change the fact that what they’re doing is dangerous and will lead to a loss of your balance or even your account as a whole. It may seem simple, the markets will either move up or down, so it’s a 50/50 chance that we will be right. Unfortunately, the markets don’t work like this and it is a little more complicated. In fact, there are hundreds of things that affect the markets, and simply guessing will make you wrong the majority of the time. If you want to gamble, do it away from forex, there are far better things to gamble on, but we can assure you, if you decide to do it here, you will just end up with a zero account.

Trades Are Too Large

A lot of people come into trading with the expectation that they can make a lot of money. While this is true, there are things that you need to do to protect yourself first. One of those things is not trading too large. The idea of making a lot of money can be an enticing one, it can cause people to place trades that are far too big for their account which in turn would cause them to lose a lot of money on their trades. If you place a trade that is too large for your account, a single trade can cause it to blow. Many people do this due to the lack of knowledge on how big their trades should actually be, going in blind, and then guessing is never a good strategy. So ensure that you understand how big each trade should be for your account when trading. This should be outlined in your trading plan when you create one.


Similar to the point about overtrading is when a trade simply places too many trades. The more trades that you put on the more risk that your account is under. There is also something known as margin, which is basically a figure that tells you how much you are able to trade. The more trades that you put on the lower the margin becomes, and when it reaches a certain level, your broker will actually close out all of your trades at a loss. If you don’t understand this, you will continue to put on trades until your margin is used up, then even the smallest movement in the wrong direction can cause your account to close and basically lose everything that is in it. Your strategy should have a max number of open trades allowed, try not to exceed it and try not to place trades simply for the sake of placing trades.

Using Emotions

Emotions are strong. Emotions have the ability to take over and emotions have the ability to blow your accounts. Do not let this happen. Instead, you need to be in control. If you feel things like greed, overconfidence, doubt or any other emotion start to creep in, this is your time to step away. When you trade with greed or overconfidence, which many traders (especially new ones) do, you will be putting your account at risk. You will be placing more and larger trades, trades that you probably shouldn’t be making, putting your account at risk and when you do that, there is a good chance that your account will be drained. If you are feeling emotional, try not to trade. Go out for a bit, take time to relax, and then come back with a calmer and clearer mind.

Not Using A Demo Account

It is always recommended that you use a demo account to begin with. If you are coming straight into trading then you most likely do not have any experience. You also probably don’t have a whole host of knowledge, if this is the case, then do not jump straight into trading on a live account. Instead, you should be using a demo account, this is where you can practice your strategies, practice putting on trades and basically ensure that you have some sort of idea of what you are doing before you start risking any of your own money. The last thing that you want to do is to jump into a live account with your real money only to realise that you do not know what you are doing. It is best to learn that on a demo account where your money is safe.

These are some of the things that people do that end up blowing their first account balance. We have all been there, so if you have experienced it, do not feel disheartened. Even some of the best traders in the world have blown accounts. It is simply a part of trading. Learn from it, develop yourself further and you can help to ensure that it doesn’t happen to your second or third account.

Forex Basics

Warning: These Mistakes Will Completely Destroy Your Forex Profits!

Let’s imagine that we have been trading for a while for a few months or a year, we are profitable, we are on a high and then all of a sudden, things go wrong, we lose some of if not all of our profits, but why? Why have we made these losses? There are a number of very common mistakes that people make which can lead to them losing their profits, or even their accounts. These mistakes can be easily avoidable, some through your own actions and others by changing something that you use. We are going to be looking at some of the mistakes that people make which can eat into their profits and also what you can do to try and avoid making those mistakes yourself.

Forex Broker Charges

From the very start of your trading career you will be using a forex broker, these brokers, unfortunately, have charges. Each broker will have completely different charges and they come in the form of three different things. There is the spread which is the gap between the buy and sell price, some brokers will artificially increase this gap as their way of taking payments for each trade, others trade straight up commissions. Every trade that you place will have a charge attached to it that you must pay. There are then swap charges, these are charges that you pay to your broker for holding trades overnight, they vary with the interest rates of the markets. All three of these charges have the opportunity to eat into your profits, when deciding which broker you wish to use you will need to take this into consideration, if you are using a scalping strategy then having a broker with high charges will basically use up all of your profits making it pointless. So ensure that you chose the right broker that won’t eat into your profits from the very start.

Swap Charges

We briefly mentioned swap charges above, but they can have a larger effect than you may think. We have seen trades being held over a period of a week or two which have had swaps so large that even though the trade was in the blue, it was in fact trading at a loss, and the longer it was held the larger that loss became. You need to keep track of your swap charges, especially if you have a lot of trades open at the same time, if you fail to do this, they can very quickly mount up and overwhelm your profits, even causing you to take a loss when the trade is in fact winning. Know your swaps and understand what swaps are going to be applied to your trade, it may be worth taking a small loss in order to protect yourself from larger swap charges.

Forgetting Stop Losses

One of the major parts of your risk management plans will be your stop losses, they are designed to protect your account and should be there with every single trade that you make. However, it can sometimes be easily missed, especially if you are very quickly trying to put on a trade at the current price due to volatility, some strategies will have you placing the trades and then coming back to them to combat the losses, but again, this can mean that it is easily forgotten. We need to ensure that we are placing the top losses with eerie trade and that we are putting them on as we open the trade. If you feel what you do not have time to put them on, then put them on as soon as it is open, if not then avoid trading in what manner completely, you need to take your time to ensure that they are on so that you do not take larger losses which could take away quite a lot of the profit that you have previously made.

Not Diversifying

Think about how many currency pairs or assets you currently trade? If it is just one or two then there may be an issue. It is true that when you start out that you should only concentrate on one pair until you understand it, but once you do it is important that you start to branch out. Having trades on more than one pair, more than two, or even more than three will help to protect your account, it ensures that you are not putting all of your money on a trading pair. This means that even if one goes negative, the others will be there to help maintain your current profit levels and to help protect your profits and account. It is important to branch out, but remember not to do it too quickly and overwhelm yourself.

Changing Your Strategy

If your strategy is bringing you profits, why would you change it? The thing is, that many people do for some reason. We cannot explain it, but if you are doing something and it is working, do not change it, the old saying, “If it ain’t broke, don’t fix it” is very relevant here. Yet we see people do it all the time, changing things because they think that it will make them that little bit extra. That extra would be nice, but why risk losing something that you already have in order to get it? Stick to the working strategy. It has brought you profits up to this point, so there is no reason why it will not bring you more afterward too.

Letting Emotions Take Over

Emotions are wonderful things, they make us feel and they allow us to do things that we otherwise would never dream of doing. Unfortunately, when it comes to forex, those emotions are not exactly the most helpful thing. Things like greed, overconfidence, doubt, and pretty much anything else can have negative effects on our trading. Things like greed and overconfidence can cause us to trade outside of our plan, to place additional trades, and to also place larger trades than we are used to which is dangerous and is a sure-fire way to make some losses. Things like doubt can make it so we simply do not want to place any trades, to avoid putting them on makes trading completely pointless. If we aren’t going to trade, why are we sitting here with our money in an account? It can be hard to control the emotions, but if you feel them taking over, take a break, take a step back and relax away from trading, this way you can come back with a clear mind and then continue to trade to the plan.

So those are some of the things that people do that ends up eating into their profits. There are of course a number of other things that people do, some are obvious, some are not so obvious, but what is certain for all is that we need to stick to our plans and not change things. Understand what and why we are trading and then simply let the profits grow without any added interference that could potentially cause us to lose some of those hard-earned bucks.

Forex Basics

Avoid These 5 Trading Mistakes Like the Plague!

Mistakes are simply a part of life. Even so, there are times when mistakes can be completed avoided through information and education. Allow us to save you both time and money by pointing out five of the most problematic mistakes made by Forex traders.

Mistake #1: Trading Without an Education

Forex trading is great for the fact that anyone can decide to take it up, as long as said person is at least 18 years old with a few dollars or so to invest. On the downside, some traders rush into things too quickly out of eagerness to start making money as quickly as possible. Those that don’t know much about what they’re doing are bound to make mistakes and might not even realize how the mechanics of trading work, thus resulting in a loss of funds or of their entire deposit.

The good news is that many different educational resources are available online for free. One can simply search for terms like “forex trading for beginners” to get started. Once you think you’re ready, you can use more hands-on resources like quizzes that test your knowledge or try practicing on a demo account to get the best idea of where you stand.

Mistake #2: Risking too Much

Have you considered how much you want to risk on any single trade? The answer is different for everyone, but we should keep the same principals in mind. The more you risk, the more you could lose. Yes, risking more can lead to more profits, however, it’s better to trade with risk management in mind than it is to risk large amounts on a single trade. If you want to avoid this problem, it’s good to know that many experts recommend only risking 1% of your account balance on a single trade, or in some cases up to 5% at the maximum. This helps to ensure that you don’t lose too much if the market goes in an unfavorable direction. You can also accomplish risk management through other means, such as setting a stop order, trailing stop, take profit level, and so on. 

Mistake #3: Emotional Trading

This mistake has a lot to do with trading psychology and the ways that your emotions can affect your trades in a negative manner. Revenge trading, overtrading, or analysis paralysis are notable examples of this problem. While this category covers a lot of ground, the results of these various emotions usually lead one to lose significant amounts of money. For example, a trader that is overconfident is more likely to take larger risks and might not base their strategy off of solid facts because they feel as though they are on a lucky streak.

Controlling your emotions can be difficult, but the first step is simply identifying that a certain emotion is affecting your trades in a negative way. From this point, you can try to deal with that specific emotion and learn to control it. Some people like to use calming techniques or might need to be reminded that it’s okay to lose sometimes. If you’re ever feeling overwhelmed, it’s also okay to take a break from trading until you can gather your thoughts.

Mistake #4: Trading Without a Plan

Having a trading plan and strategy is crucial for success because it helps to determine the whys and how’s of your trading. With specific goals in mind, you can make more informed trading decisions that are based off solid evidence like technical or fundamental analysis, or both. If you trade without a plan, you’re likely to lose money. You also don’t want to rush in and try a new strategy with your real, hard-earned money. The best way to start is by testing a new strategy on a demo account before using it on your real account. Even if you’re a more experienced trader, you should still use demo accounts to your advantage for this purpose to avoid losing real money. 

Mistake #5: Not Staying Up to Date on the News

The price of currency pairs is closely related to certain economic factors and events. You need to know about news that can affect the economy in other countries as well as the one you live in so that you can be prepared for any news that might affect the markets. Often times, big news can cause market volatility. If you aren’t aware of what’s going on, then you might find yourself caught in an unfavorable market, which could result in some large losses. Since there are several countries that you need to know about, the best way to stay up to date is by using an economic calendar. Many economic calendars are even color coded so that you can see what is expected to have a high, medium, or low impact on the market. Or you can choose to avoid trading altogether if things look bleak.

Forex Psychology

Mistakes and Fears of the Modern Trader (and How to Correct Them)

Probably a lot of you know how to drive. If you don’t drive, surely you can find some similar perceptive-motor technique that you have ever mastered-cycling, skating, swimming, etc.- If you remember the first time you tried to master the technique, you will discover many things that you had to attend to at the same time.

The hands did several things -to handle the steering wheel, the gear lever, the turn signals, the lighter, the radio…at the same time they had to pay attention to what the feet were doing, responsible for a complex task in which space-time coordination was fundamental -accelerator, clutch, brake-. All this complex network of coordination was only the beginning of the task since outside there were the keys to “good driving”, the awareness of traffic, the state of the road, traffic lights, pedestrians…

Narrated in this way seems an “almost” impossible or at least extremely difficult task, and yet, with the passage of some months and the accumulated experience, what does that task become?

The key to such a change in effectiveness, in performance, in dexterity for the development of the task is, as you may have concluded, in “experience” and in an appropriate process: “the path of learning”. It is not a skill that requires a very sophisticated technical qualification, rather they are simple gestures “accompanied” in a “harmonious” way. A beautiful and precise dance -sure that once they have felt it, the publicists of BMW know it- in which everything “flows” without resistance, and that makes us “enjoy”.

The easiest way to acquire any skill is to practice small fragments one by one, just as we learned the task of driving a car, what is needed is to organize the task into small elements or parts, in order to practice each part to the point of turning it into an “automatic”, “effective”, “unconscious” activity, this allows us to devote “attention” to other possibilities, other components of the task. Subsequently, we can practice these new elements until they also reach the same category of automated motor pattern to which we do not have to pay any conscious attention.

When I met Alfredo Rodriguez, I was immediately struck by the enormous amount of perceptual resources available in the task of trading, even when it came to speculating on a 1 min chart. On a product like Dax. For my work in the virtual consultation, I have had the opportunity to know many “styles” of trading, many tempos, many ways to live the pressure or fear.

We have worked for a long time on these elements, always trying to answer a key question:

What are the right tools to achieve these automatisms?

How to get an approach to trading with plenty of available capabilities?

How to enable the existence of surplus resources that help us maintain flexibility and mental agility, at levels that allow us to make appropriate decisions in tenths of a second?

We have set up a “virtual consultation” where, as a “laboratory”, our clients “investigate” the essential bases of its characteristic structure, an unavoidable preliminary step if we aspire to the creation of “custom” instruments, individually optimized. Unfortunately, there are no “universal recipes”, simply because “control”, “stop”, “fear”, “risk”, are words that take their content from the deep roots of the human being, each of us recreates them and gives them meaning by always drinking from the source of their history, of his fantasy, of his own existence.

G: Could you list the mistakes you feel you made?

X: Precipitation, entering the market without analysis (of any kind), not holding the position -that is to say, getting well and rushing into closure-, in general when I am inside I become obfuscated. Lately, I can’t stand anything, for or against, but much less for.

G: You go in compulsively?

X: Yes, I often enter by entering, I get very nervous. The worst thing is that before the losses increase the trade and everything is even worse. Now I have started taking Seroxat, I had never taken antidepressants until now, I was used to solving things differently.

G: Could you look for an image or a descriptive metaphor of how you feel?

X: I’m like a mouse, which plays a cat…

G: Perfect, keep developing that image, how is the game? , how does it develop? , where is it going?…

All of you can imagine the possibilities of a mouse facing a playful cat and understand what is the most likely development of such a game. From our point of view, Mr X’s trading will be marked by this way of “feeling” the market, his subjective “perception” of trading creates -perhaps unknowingly- a whole “script” of what happens and what will happen until that script is modified.

That unspecified “text”, that way of living the market, the system, the times, the minutes with which one works, the indicators and signals are chosen, absolutely everything will be “catalyzed” by this special way of “seeing” and “feeling” markets.

G: It’s very important that we understand your “script,” what the spurious elements are. We have to check your “backpack” and identify the heavy elements that are not absolutely necessary and that activate those self-destructive “messages”. Look in your memories for a message repeated by your parents, friends, family…

Y: I remember that many times they told me not to try hard in the studies, I was not going to achieve anything…

G: How does that make you feel?

Y: Well, I think it influenced a lot that I didn’t try hard in his day, today I regret not having done it, but it’s already late… Thinking about this that you are proposing to me, I perhaps looked in the markets to show them all that they were wrong, that I am worth it, that I can do great things like for example make a lot of money in this.

G: Some kind of challenge?

And, Yeah, something like that.

G: And you think it’s the most correct position to build a profession? To do it out of spite?

Do you think resentment and anger will help you build a “healthy” role?

Y: Well, now that you mention it, I’m sure I don’t… In fact, I threw myself into the adventure without knowing anything of analysis, or means, indicators, anything at all. I was going with the bald price go. Talking to you gives me the feeling I started the house off the roof.

G: Why do you think that 90% of the people who start with this leave-ruined-the first year? There is a superb gesture in that, people come with the whims of a winner, believing that without training and without personal work can beat people who have been living on this for 30 or 40 years.

And: It is true, sometimes we sin of too naive in that sense, in that gesture, we are signing our sentence of ruin.

G: In what you were saying before the “rebound”, that “these are going to find out what I am capable of”, they take you to a somewhat “sinister” place. Your professional role as a trader is joined by an “immense” and heavy slab that you carry inside. That doesn’t depend on the market but on yourself. It’s an added challenge.

Y: I think I understand, it’s like I have the enemy at home.

G: That’s exactly it. On many occasions, there is an internal struggle with maternal or paternal messages, which is not explicit, but which is “marked” with fire in a very deep place of your mind. You end up living to “fight” with that message. Did you see the movie “Leolo”?

And, No, I haven’t seen her.

G: One of the protagonists is mistreated by a group of boys. From that day your life becomes a tireless race to make your body a perfect machine, weights, exercises… through tireless work you get a spectacular musculature. Many years later, already with a tremendously muscular body, he meets the same group of guys again… Do you know what happened?

And, He took revenge on them, I suppose.

G: They poked him again. His body was huge, his muscles seemed powerful. But his inner “message” remained the same. It was not an external force problem, but an internal one.

Y: I understand. And what can you do to correct those scripts?

G: Here we are, the first two exercises that I send you, are aimed at unmasking these messages. As you can see they are very simple exercises of execution but you will discover that they are very powerful if you respect the minimum rules. Constancy and patience.

Recently, I had the opportunity to work with a trader that I call “brilliant” in his technical training, in his analysis, in his way of reading the markets. His problem is that he “fails” over and over again on procedural tasks. After an excellent analysis he decides, for example, that he has to adopt long positions, and when entering the command in the TWS, he opens shorts, when he realizes, he enters a state of confusion that blocks him and prevents him from closing the open position by mistake, That makes it maintain a position that accumulates more and more losses.

When we worked on this problem, something obvious became clear to the naked eye, we are simply “boycotting ourselves”. We know how he does it, the most urgent task now is to know why?

Our proposal is a multi-level work:

At the deep level: give “permissions” to all internal folders that may be impeding good performance in the market. Detect the “gestures” and “routines” that hinder the development of a good “role” of trader -impatience, lack of discipline, impulsivity, fear, blockades-

At the technical level improve market analysis and advantageous positioning resources. It is about starting a path that should not only lead to knowledge of the markets but, more importantly, to self-knowledge. The market is a great teacher if you can hear it.

Forex Risk Management

Big Trading Mistakes That Will Hurt Your Account Balance

Seasoned forex traders will tell you that there are several mistakes that can keep you from making money, or that could even cause you to lose your investment altogether. For the aspiring trader, the thought of losing hard-earned money on an investment that was meant to help secure their future is a daunting thought. Fortunately, many professional traders have learned about these costly mistakes the hard way – meaning that you don’t have to. Take a look at our list of big mistakes that will hurt your wallet below. 

Mistake #1: Trading Without an Education

If you have a sudden whim to open a trading account, you’ll find that it can be done fairly easy so long as you have a device with an internet connection, you’re 18 years or older, and you have at least $10 or so. This is actually the most common trading mistake that beginners make, as it is quite possible to rush into opening your trading account without any real knowledge. Those that make this mistake learn fairly quickly that without knowledge of what affects the market, risk-management, different strategies and plans, trading mechanics, and other subjects, success is impossible to come by. If you want to become a trader, avoid making this number #1 mistake and spend some time educating yourself first by taking advantage of free resources online. 

Mistake #2: Risking Too Much

With gambling, the idea of risk is fairly simple; the more you risk, the more you stand to gain. It’s easy to carry this mindset over to trading, but that doesn’t mean you should think this way. The truth is that risking too much (think 5% or more) on any one trade is a quick way to lose it all, especially if you don’t have much experience. Even if you feel as though you’re on a “winning streak”, experts recommend limiting the risk you take to 1% or 2% of your total account balance. Think $1 or $2 for every $100 in your trading account. Another pro tip is to actually base this percentage on the amount you’re willing to lose for each single trade, rather than basing it off your total account balance. 

Mistake #3: Being Emotional

Those that haven’t read about the psychology behind trading emotions are usually blind to how much of a role emotion can actually play on trading decisions. There’s really a lot to get into when it comes to the subject, but here are a few examples to paint a general idea:

  • Anxiety can lead traders to spend too much time thinking before entering a trade, causing the trader to enter the trade too late or not at all. 
  • Traders that have experienced a large loss or multiple losses in a row might become fearful of making any trading moves, even if they have information that supports the moves they want to make. 
  • A trader that has made a lot of money or who has experienced multiple wins in a row can become overconfident, which leads to overtrading or making decisions that are based on little fact because one feels they are on a “winning streak”. 
  • If one is trading out of revenge, they are likely to make decisions that are quick and not well-thought-out out of the urgency to make a profit. 

If you aren’t familiar with trading psychology, you should really dive deeper into the above subjects. If you’re already trading, you might want to think about the emotions that you feel while trading, as this can affect the way you make decisions and lead to a loss of money.

Mistake #4: Believing in Magic Answers

When we refer to magic answers, we’re actually talking about automated trading robots or signals that are advertised to be 100% successful. To be clear, a trading robot trades on your behalf, while a signal is a short message that gives you information about a trade you should enter. Don’t take this as a sign that there aren’t working signals and robots out there, however, you should know that 100% success rates cannot be guaranteed. Spend time researching the developers behind these products and reading user reviews before spending your money on them, and always keep an eye on those results. 

Mistake #5: Choosing the Wrong Broker

Choosing a broker is a task that deserves a lot of thought. After all, there’s a lot to think about. What types of fees are charged? What account types are available? Is the customer service up to par? If you choose the wrong broker, you’re going to face a plethora of problems down the road. You’ll likely pay insane fees that eat into your profits, spend a lot of time trying to get in touch with customer service if you have a problem, experience delays with your withdrawals, be stuck with a lackluster trading platform – should we go on? Any of these problems could be a nightmare, so be sure to put in the effort to ensure that you’re choosing the best broker possible.

Forex Psychology

How to Successfully Avoid Trader’s Regret

Have you ever made a purchase and then instantly regretted it? Wondered why you just spent that money on whatever it is that you purchased? It has happened to all of us, it is called “Buyers Regret” and it is something that everyone experiences. It is the feeling of regretting the fact that you just spent this money on something and it happens more often the more expensive than an item is.

This same feeling can happen to traders in the form of “traders Regret”, it works much the same way and can have potentially devastating effects on both a trader’s account and also the trader themself. This feeling comes simply by the fact that you are risking your own money when trading, each and every trade that you make is a potential loss and will potentially cost you that money, this can lead to a few different things.

First, let’s look at what sort of trades can often cause this, we all should have our strategy and trading plan in place if you stick to it, it is far more likely that you will not experience this very strong emotion. However, if you have been listening to others and placing trades based on something you have seen or heard then as soon as you make that trade, you may wonder why you have done it. The same feeling can happen when you decide to step out of the comfort zone of your training strategy, as soon as you place that trade, you know that you have moved away from your strategy and put your account in some additional risk.

The feeling can also come when you have done nothing wrong, this is more obvious for those that are risk-averse if you do not like risk, then placing any sort of trade which adds an element of risk will potentially cause traders regret, this feeling can actually make it far harder to place trades in the future as the feelings that you had can linger in the back of your mind for quite a while.

The problem with traders’ regret is the fear that it can cause, it can make it far harder to make additional trades, it can prevent you from wanting to have that feeling again and so you begin to miss great trading opportunities, even those that are fully in line with your strategy and trading plan. Sadly, sometimes traders’ regret can get the better of you, as soon as that trade is open, you get the feeling and close it for a small loss, the trade can then go on to win. The next trade, it’s the same feeling and so you close it again, this can continue for quite a while. Most people will look at that and think that you probably shouldn’t be trading, this is not the case, what is needed is for you to work out a way to get over this feeling.

So let’s think about ways that we can help to avoid this feeling or to at least reduce it once a trade has been opened. The first thing that you need to do is to set up a trading journal, this is something that you can use to write down every trade and every decision that you make. This is perfect for reviewing our trades, and can also be a deterrent for traders’ regret, mainly because when you are worried about something you can look back at your previous trades to see why they were taken which can give you more confidence in the ones you are now making.

Having a solid trading plan can also help, if you have done the analysis and it is fully in line with your strategy then there should not be anything to fear. Knowing that proper analysis has taken place and that it is your decision should help alleviate some of the anxiety once the trade has been opened. This is a far better way of managing your trades when compared to copying trades that others have suggested.

While it may not be a good way to reduce the anxiety, a way of avoiding the potential of closing trades early is to simply input a stop loss and a take profit, place the trade and then walk away, leave the trading terminal, let it do its thing If you are not near the platform then you cannot close it, it will allow your strategy do what it was designed to do, after a while of doing this you will come to realise that your strategy is working, using itis giving you overall good trades, so it will help to alleviate some of the anxieties around placing trades.

Traders’ regret is a big thing, it can be very damaging, doing what you want to alleviate the feeling is important, it can take time, a lot of time, but the more confident you are with your strategy and trading plan, the easier it will be to avoid this very strong feeling of regret. In the end, you need to try and ignore the feeling and just make that trade.

Beginners Forex Education Forex Basics

Avoid these Common Trading Blunders

There are a lot of blunders and mistakes that you can make as a new trader and also as an experienced trader. What we need to remember is that mistakes happen, both small ones and large ones, sometimes it can be our own fault and sometimes it is completely out of our control. What is important is that we learn from those that we have done, and try to avoid those that we have not, so we have come up with a list of some quite common mistakes that traders make, but also ones that you should keep an eye out to try and avoid.

Not having a trading plan:

You are probably bored of hearing this now, but a trading plan is wanted, in fact, it is needed. If you are trading without a trading plan, you are putting your trades and your account in danger. When first starting out, you won’t have a full trading plan created, but it is important to get one started, as you continue down your trading journey and learn more you can add to it and adapt it to the new things that you have learned. What is important is that you have one, it will detail the requirements to get into a trade and how to get out, as well as everything in between. Without it, you will be trading blind and this will only lead to ruin.

Chasing results:

Please don’t do this, chasing results leads to overtrading which leads to loss. If you start to chase results, you won’t be taking the very specific rules that you have created into account, you will begin to start making bad trades or even completely guessing your trades, this will only lead to losses as you cannot predict the markets. You need to stick to your trading plan, do not chase results, they will come in time and in a controlled manner as long as you continue to follow your trading plan.

Forgetting your risk tolerance:

Every single person in the world has a set risk tolerance, this is how much they are willing to risk or how much they can risk without it consuming every thought that they have that day. You need to remember yourself, pushing yourself too hard will begin to cause unnecessary stress that you really do not need. When you created your trading plan, you should have taken your risk tolerance into account so that you always remain around it or below it. If you go too high, you will begin to hate trading and it will feel far more like gambling, which is not a good route to go down.

Forgetting the time:

This is more about getting obsessed with the markets, they can be exciting and then can be boring, but one thing we can be sure of is that once you are in them, you don’t always want to get out. What you do not want to do is to get obsessed, you need to be treating trading like a job, you would not want to sit at your job 14 hours a day, so do not do it with trading, be sure that you have set times, especially when starting out and things generally take longer to do. It’s not healthy for you or your relationships if you are spending too much time by yourself on the computer.

Not using stop losses or take profits:

You most likely have been told by someone that you should be using stop losses, you should be using them to help limit the amount that you can lose, and they are right. Stop losses are essential, they limit the amount of risk that you are putting on each individual trade. They are also there to save your account. Not setting stool losses basically allows a single trade to potentially blow your entire account should it go too far. Always use stop losses, they should be cemented into your trading plan, if not, go and put them in right now.

A similar thing can be said about take profits, while not as potentially devastating to your account, not using take profits can cause you to lose out of profits, some may argue that they can actually reduce profits, but a take profit used is that money banked. If you created a risk/reward plan within your trading plan then there should be take profit levels taken into consideration, others may refer to use a trailing stop instead, but that still acts as a form of take profit, be sure to use one, especially when starting out.

Not cutting losses:

This goes along with not using stop losses, but let’s imagine that you do not have the set and your trades have now gone into negatives. What do you do? Do you hold them and hope that they will turn around or do you cut the loss and move on? Knowing when to cut is vital and also a very important thing to understand. You do not want to let your losses start to run and control your account. In your head, you should have a percentage that you are willing to cut, once it gets there cut it, regardless of what you think. That is your set target and it is to protect your account, so cut it, do not let it run or you will be risking your entire account instead.

Using grid or martingale strategies:

One of the easiest strategies to learn is the grid strategy or the martingale strategy, mainly because there is very little strategy to it, they are also the ones that you see the most around the internet. So if it’s so easy, and so popular, why don’t we all use them? Simply because they are also the riskiest strategies around. The strategy is simple if a trade goes against you, you simply open up a trade going in the same direction as your original, now you have two, trades, it continues further, you open up a third, you continue doing this until either your account blows or it reverses and you close everything once the overall position is profitable. The only real difference between grid and martingale is that with martingale you increase the lot size each time and with grid you keep it stable.

You can probably see how dangerous it is, as soon as you start adding positions or lot sizes, the drawdown starts to grow exponentially, not a safe thing to do at all and it has blown hundreds and thousands of accounts in the post and they will continue to how many more in the future.

Being influenced by others:

You have your strategy all setup, it is working for you, so why would you suddenly listen to a random person on a forum somewhere that the analysis that you have done or even that your overall strategy is wrong? What do they know? They don’t know how your strategy works or how you can do the result of your analysis. Your strategy has been working so why would you second guess it because someone else said something. Stick to your guns, do not change things just because someone loses things differently. You are here to trade your plan, not someone else’s.

Blindly following signals:

Sometimes signals can be a godsend, it is a way to put on trades that someone else has done all the analysis for and so you just need to place it a reap the regards. Unfortunately, it isn’t quite as simple as that, placing trades from signals completely blind means that you have no idea why it was placed.would you give your money to someone to place on the horses? Probably not, as far as you know, they are just posting random trades, if you are going to follow signals, be sure that you understand the reasons behind the trades and how they came to those conclusions. This will allow you to do some of your own analysis to help confirm a signal before putting one on, allowing for far greater accuracy and confirmation of each signal.

Too much risk per trade:

Your trading plan should cover this, it should have a risk management plan and get into it also, this will detail exactly how much you are willing to risk with each trade. Depending on your strategy this could be between 0.1% per trade up to 2% per trade. Of course, some can go higher, but that is putting a lot of risk on your account, and the higher you go, the more likely you are to blow the account. If you have not got anything set, then you are risking the entire account with each trade, make sure that you limit the risk that each trade takes, this is one of the primary ways of keeping your account safe and alive.

Too much emotion:

Motions are extremely powerful, they are powerful enough to take over your entire mindset and to alter the way that you trade. Emotions like greed and overconfidence can cause you to through your trading plan completely out of the window. They can cause you to trade outside the plan on what you think will happen, you need to remember that the markets do not care what you think. You need to be able to control your emotions, when things are going well, remember that it is your plan giving success, not you when things are going wrong, the plan works and will turn things around to give an overall profit. Always trade with the plan and not with your emotions.

Following the herd:

Many new traders will pretty much blindly follow what other traders are doing, if they see a lot of people going long on EURUSD then they most likely will too, why? Simply because others do, they have no knowledge behind whey they are going long or what other people see in the markets as to why they have gone long. You need to be able to do our own analysis and to come to your own conclusions. Do not just do things because others are doing it, in anything in life, make up your own decisions and then own those decisions that you do make.

Not continuing to learn:

One thing that a lot of traders do is that they learn their first strategy, once they understand it they stop at that. They have their strategy and so that is all that they need. However the markets are an ever-changing thing, you always need to be able to adapt and the only way to do this is to continue to learn. As soon as you stop, you are being left behind, there are always more things to learn, from new strategies, risk management, various elements of the markets, it is a never-ending course and one that you should not take for granted, you can never learn everything there is to it, but a continuous learning plan is the best way forward.

Losing track of your goals:

When you started trading you would have set yourself a set goal, something that you want to aim for. You need to keep that in mind and in perspective. If things going well, do not suddenly move your goal ten steps ahead, if things are going well, use that goal to remember why you are here and what you want out of it. That goes needs to stay at the forefront, write it on your wall if you need to, that is your source of motivation and why you are here, so do not lose sight of that and keep working towards it, no matter how hard things are at that point in time.

Diversifying too much:

A lot of strategies that you see out there say that they can work with any currency pair or asset available, those sorts of strategies are just hitting and hoping, instead, when creating a strategy, you need to focus on one or two currency pairs or assets. This way you can ensure that your strategy works with those pairs and that it will be able to deal with its movements and changes. Every single asset and currency pair moves differently and is influenced by different things, so a single strategy cannot work for all of them, instead, focus on learning a few of them and make them your bread and butter.

Not asking for help or advice:

We mentioned earlier that blindly listening to others is a bad thing, of course it is, but so is not asking for help when you need it. Sitting in front of the screen and markets not knowing what you should be doing or not knowing why something went wrong is not a good position to be in, instead ask for help, others may be able to give you an insight into what went wrong and reasons why your strategy may not be working. So not just kindly do what they suggest, instead use the knowledge and information that they have given you to look deeper into what you did so you can know exactly what went wrong. Do not sit there by yourself wondering forever.

Not asking for support:

The last point that we will point out can actually be one of the most important, trading can be stressful and it can be lonely. If you ever feel that you are becoming overstressed, frustrated, or lonely, get out and ask for help. The most important thing in life is your health and your well-being, do not let that suffer for your trading. Friends and family are important, so keep them close and keep in touch with them, do not lose them over trading Look after yourself. A lot of traders let trading take over their lives, do not let that happen to you.

There are of course more things that a lot of traders get wrong, but we don’t want to give a list of 10,000 different things that makes it sound like you can’t actually do anything when trading without doing things wrong. You will make mistakes, that is the course of life and anything that we do, what is important is that when you make one of those mistakes, you are there to make it better again and to learn from the mistake that you have made. Do not fear that you have done any of these, as soon as you have realised that you have done something that you should not have, or that something didn’t go your way, that is the time to make the change and improve. Of course, some things here may actually suit your style, so it is up to you to decide what is actually good or bad and what you need to change, but change is the catalyst for success, so do not stick with something that isn’t working as well as it used to.

Beginners Forex Education Forex Basics

What is the Number One Forex Trading Mistake?

Are you eager to become a successful forex trader? Many people read stories about successful traders online and begin to daydream about quitting their desk job in favor of being their own boss. Others might come into a deal of money and look to invest it for more profits. Or maybe you’ve read a trading article that makes it seem like starting your trading career is easy. Regardless of the reasons why you want to get started trading, the top mistake you can make is opening a trading account without a proper trading education.

You can’t learn everything you need to know overnight. Many beginners spend a little bit of time reading articles or conducting research, but they jump into trading too quickly. If you don’t use the proper risk management and a good trading strategy, you’ll never make money. Being well-educated in this field will help to set you up for success.

Forex traders need to be able to analyze technical and fundamental data. Traders should be able to tell how the news might affect the market, interpret the data on charts, understand different trading strategies, and so on. You’ll also need to understand trading mechanics like how to place orders, exit positions, etc. There’s a lot that goes into perfecting a trading strategy and making accurate trading decisions. It’s impossible to do this without any background knowledge.

Those that are in a hurry to get started are also prime targets for scammers. If you don’t understand what types of fees and things you’re looking for, how can you know that you’re opening an account with a reputable forex broker? Many scammers offer flashy promises or guarantees of profits to lure in traders that don’t really know what they’re doing. Those traders lose their entire investment quickly.

We do have good news for traders that are willing to put in the effort. The internet is filled with free information about trading, like forex articles, webinars and seminars, eBooks, and other resources. Many brokerages even offer educational resources to their future clients directly, free of charge. Try searching Google or another search engine for this information:

Forex basics: terminology, principles, theories, and calculations.

-Forex Trading Mechanics: how to place an order, exit a position, change your leverage, operate a trading platform, etc.

Forex analysis: look at technical and fundamental analysis

Forex Strategies: there’s a lot of them, like scalping, day trading, news trading, etc.

-Risk-management: look at ways to minimize your losses, such as setting a stop loss

Reading articles like this one that revolve around trading mistakes and trading psychology can be helpful as well. When you think you’re ready, you can even practice on a demo account before opening a real account. This can give one an excellent idea of where they stand and if they are truly ready to make an investment.

Learning forex trading requires time and determination, it isn’t something that can be done quickly. Rushing to open a trading account without a proper education is the number one trading mistake that most beginners make. If you read something online that gets you excited about forex trading, then that’s great – you should keep that enthusiasm while understanding that there is no ‘get rich quick scheme’ or shortcut to becoming a successful trader.

Even if you have the money to invest right now, do yourself a favor and get a solid education before you open a live account. If you’ve already opened one and don’t know what you’re doing, try switching to a demo account and take a break from live trading until you’re ready. Your brokerage should hold your funds for you but be sure to check for any inactivity fees. Some brokers charge these fees after a month or more with no trading activity.