When a retail trader is starting out, it’s easy to develop bad habits and get caught up in the excitement of trading foreign exchange. These 5 behaviours are the top 5 most common bad habits.
- Trade size too big
- Wrong entry level
- Wrong direction
- Trading Mid-Range
- Over Trading
If you see the above bad habits are becoming common practice, then it might be time to stop and reevaluate how to trade forex.
Trade size is an important aspect of every trading plan. Traders quickly forget this to their own liability. Many traders are not reaching their trading goals because their trade size was too large for their account equity which leads to reluctance of letting go of losing trades.
New and inexperienced traders tend to over expose themselves and when the market goes against them, a large percentage of their account dissipated.
Once you have a trading plan that uses a proper risk/reward ratio, the next challenge is to stick to the plan. Remember, it is natural for humans to want to hold on to losses and take profits early, but it makes for bad trading.
We must overcome this natural tendency and remove our emotions from trading. The best way to do this is to set up your trade with Stop-Loss and Limit orders from the beginning. Use a proper risk/reward ratio (1:1 or higher) from the outset, and to stick to it. Once you set them, don’t touch them.
Do you ask yourself:
Why am I losing money?
I like to address all these behaviours in my workshop, they are easily broken to get you back on the path to profitable trade selections. My techniques, methods and procedures are 30 years in the making.
You need to get into a routine of good practices. At FX Trading 101 my team and I, will teach you capital growth strategies with risk management to manage adverse market movements and to tip the percentages in your favour.
It’s time to cut your losses early and let your profits run. Remember to keep learning and always do your research, be patient and know when to stop, even when it’s profit.