- June 27, 2022
Table of Contents
The biggest mistake made by novice traders when first starting trading is to tend to underestimate the theory. Learning forex trading on demo accounts usually leads to them ignoring learning altogether and doing it all alone as soon as they feel confident.
Many sources can be used as educational material. Starting from private classes, attend workshops or class training online. This activity is intended to make your mental and trading skills always grow over time.
A trading plan is the first thing that is prepared before entering the market. This is very useful in helping your trading become more disciplined. Can prevent you from making your own rules when trading. You must remember that in trading there are basic rules that must be followed, to keep equity stable, the consistency of accumulative transactions meets expectations.
Planning here is not just entry and exit, just buy and sell. The biggest problem is after the buy or sells entry, what do you want? Taking what profit or limiting the loss at what number? Until the exit plan. This is very important because there are many unexpected things in forex trading.
Leverage and margin are facilities that are provided, to be able to maximize your trading using the capital you have. The mistake that beginner traders usually make is not really understanding the meaning and use of leverage and margins. Margin and leverage are like double-edged blades that can increase your profits or increase your losses.
Traders have learned to know the basics of trading, then traders do not enter based on personal analysis. Traders using recommendations must buy or sell in one pair without understanding, why should they buy or sell. In this condition, the trader will experience a deadlock and confusion, when the market goes not according to expectations so you have no alternative attitude what will be done.
Averaging is one of the strategies in trading, but it is not recommended to do when the position is losing. This is the same as multiplying the risk and getting you stuck in a margin call position.
Not using Stop Loss is the same as giving up capital for free to the market. Because Stop Loss makes your trading safer by controlling the price rate that occurs in your account. There is no one thing that is not dangerous in forex, all have risks. But you have to minimize the risk and control it by using stop loss in every trading activity.
When changing from one pair to another, sometimes a chart condition is very interesting to install. Though you have never understood the pair, from a fundamental or technical perspective. Better, a trader focuses on one pair rather than trading on many pairs that have never been studied.
To trade forex, traders use certain platforms of their choice. Then there will be costs that vary, ranging from commissions, swaps, and spreads. The three components of these costs must be known and calculated carefully, to maximize the results of the transaction.