3 mistakes to avoid when trading forex - ForexLive - ForexLive - ForexLive

What are the essential mistakes to avoid?

Trading forex is an alluring way to make money, either as a hobby or as a professional trader. But many individuals make the mistake of not easing into the markets and playing all their cards at one go.

While an experienced trader will tell you that it's necessary to take risks when trading Forex, making a rookie mistake is enough to make a trader fearful of the markets and miss out on a fruitful trading career.

Here are 3 common Forex trading mistakes that you can learn to avoid when entering the market:

1. Being a Know-it-all

Confidence is indeed a key part of a successful trading experience, but false confidence is enough to make you lose your investments before your career even kicks off.

By being humble and controlling your ego, you are more likely to approach the markets with patience and accept that you are not an expert on the complex Forex market.

Instead, seek knowledge and learn from more experienced traders, read up on news events and understand that there's always room for improvement.

The Forex market can be complex, so it's paramount that you do your homework before taking a risky decision.

There are plenty of tools out there that can help you succeed, such as LonghornFX's economic calendars and daily technical analysis group on Telegram. These indicators can help you make better trading decisions in both the short and long term.

2. Lack of Risk-Management

Using leverage is an excellent way to maximise your earnings, but many newbies mistakenly take advantage of this tool without understanding the margin requirements. You can practice trading with leverage using a free demo account offered by LonghornFX, before you're ready to trade live.

Once you master how leverage works, you'll be able to increase your profits by up to x500 using leverage of 1:500! Trade with 1:500. Moreover, using stop losses and take profits can help you manage your risk by automatically closing your position when it reaches your set parameters.

This means that you won't lose more than you can afford, and that you would close a profitable position before risking the price dropping lower. A bonus to using these tools is that you don't need to watch your positions 24/7, and can feel more at ease when you're not following the markets closely.

3. Letting Your Emotions Take Over

Uncontrolled emotions are the primary disruptor to Forex traders. As humans, greed, fear, uncertainty and excitement are unavoidable, but that does not mean you can't learn to trade objectively.

By setting a plan and sticking to it, traders will be less likely to be swayed by their emotions. The best way to master this skill, however, is through practice.

You will make mistakes throughout your trading journey, but there's always a lesson to be learnt! Ready to start trading?

By signing up to LonghornFX, you benefit from access to over 18 assets through the MT4 platform, narrow spreads and swift deposits. Sign up today to get started.

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https://www.forexlive.com/Education/!/3-mistakes-to-avoid-when-trading-forex-20210520

2021-05-20 12:18:38Z
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