If you are new to Forex Trading, performing this whole trading process would be challenging and exciting for you. At some point, it might discourage you because you are not getting the sum of profit that you deserve the most. No matter whether you are new in the trading or even if you are the professional one, there are slight mistakes which you need to avoid gaining sufficient success.
Right through this quick guide, we will explain to you some of the mistakes which you should avoid as a Forex beginner, along with their solutions. Let’s get into the discussion!
Mistake no. 1: Not doing proper research
All the currency pairs are closely linked to national economics, and they are affected by many factors. They are even traded as 24/5, which generally means that there is something that will let the market move a bit.
Therefore, you should always do your complete homework before you make your way into the market. You should be aware of all those upcoming events which can affect your whole trading. Plus, it would help if you also forecasted all those events, which can completely swing the entire market. Therefore, please pay attention to the technical indicators and compare them to get a proper event analysis.
Mistake no. 2: Taking enough risk than you can afford
One major mistake which most of the new traders make is the misunderstanding on how leverage works. It will help if you familiarize yourself with the margin and the leverage to avoid any accidental loss coming your way.
The maximum percentage of any invested capital should be between1% to 3%. For instance, if you have $50,000 of the equity, you should be at the maximum risk of 2%. Always stick yourself to the maximum before you set it.
Mistake no. 3: Trading without a Net
You can’t keep yourself updated with the Forex market all the time for 24 hours. By stop and limit orders, you will be able to move in and out of the Forex market at predetermined prices. This is how you will be able to make some strategies and better plans for successful trading. However, by placing the contingent orders, you cannot limit your risk for losses.
Mistake no. 4: Trading from the start
The last major mistake many of us make is about trading, which we always do from scratch. This is a big mistake and if you are making it right now, stop yourself! It would be best to never start trading with the hand-earned capital because it can directly put you at high risks.
Before you plan to start trading with real money, you should open the forex practice account and then use the virtual funds to look for some trading plans. Never look at your emotions because it would only give you significant damage in terms of losses at the end of the day.
Avoid following any of the above mistakes that we mentioned for you and keeping yourself miles away from it. Your minor negligence will make you lose all your invested money in just a few seconds.