There is no way that you can trade forex and not make mistakes, but this is especially true in the beginning. Knowing that, the worst thing a new trader can do is to race through a trading account by either not understanding how the market works or by placing trades that are too high. Learning the market doesn’t happen over night, and even after several successes there is still more to learn. In fact, not doing your homework and being prepared is the number one mistake that traders make. Sure, even with all the studying you’ve done you can still come up with a number of losses. But that’s not the point. The point is that it takes a lot of studying, research and plain hard work to get to a point where your trades are under control and you have a decent percentage of wins.
Building Your Trading Foundation
Unfortunately, the best traders weren’t born that way. As easy as it may look to an outsider, they had to work very hard to get to the point of being successful. What that means is that they put in the hard work to build a strong trading foundation. That begins with taking courses from experts, choosing trading gurus and following them, understanding the charts and how the news can play havoc on the foreign currency market. Even after all of that, you’re not ready to begin placing trades until you have ample experience with a dummy account under your belt. Anyone who skips any of these steps will have a very hard time making it as a long-term trader. The most likely scenario for a trader who has not built a good and knowledgeable foundation is that the account will run out of money quickly. That is why not being prepared is the number one mistake trader make. Before they’ve barely begun to get experience they can be out of funds.
Running the Race
If you want to be in the race for the long term, spend the time it takes to prepare. Once you have passed those steps and begun in forex, you can find the tricks to continue learning while keeping your momentum going. Beginning from the first trade in your dummy account, be sure to write down everything pertaining to that trade into your trading journal. Make a note of the trading atmosphere, relevant news items, market direction and how you made a decision according to your own trading style and charts. This is the best way that you can not only maintain your foundation but to also build on it. As you go over your trading journal at the end of each session or once a week, you can see the weak points in your trading system. This is how you can adjust your charts and trading style to pick more winning foreign currency pairs. The longer you can stay consistent in learning from your own journal, the better your chances will be at becoming a successful trader.
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