3 Mistakes New Forex Traders Make
Foreign exchange trading is an ever expanding way of making extra money. Loads of people who started off trading Forex as a hobby are now doing it full time. And why not? It gives you the chance to work from home, at your leisure, and make more money than you might at an office job.
More than that, you don’t need heaps of experience to begin. You can learn as you go, and work your way up to being a top trader. With the right Forex broker and some in depth research, there’s no reason you should not be able to make some good money.
But many new Forex traders make some basic mistakes. Here are 3 of the most common.
Eschewing Trading Capital
When you start trading Forex, you absolutely need to know one thing. Don’t trade with the money you need to live on.
Some people think they’re smart enough to trade Forex and make money immediately. But even if you have the smarts, you’re entering dangerous territory. See, because there is so much relying on you not losing this money, you end up making bad decisions. That’s a fundamental of trading psychology and it happens all the time.
So, before you trade, make sure you have trading capital that you are able to lose. While no one likes to lose money, the fact that it’s not what’s putting food on your table will take off a lot of the pressure.
Not Using Indicators
I get it. Many indicators can be confusing, and you don’t want to overdo it when you still lack experience. But indicators give you a huge advantage when it comes to decision time, and you shouldn’t rest on your laurels by only using those that seem most simple.
Once you’ve gained some experience, you can start using tools like the Accumulation Distribution Indicator to drive your trades in the right direction. The A/D indicator weighs shifts in market behavior, and is hugely beneficial in determining the market’s moods.
Forgetting about Bitcoin
Bitcoin is all over the news these days and for a good reason. It’s on the up. The price of Bitcoin has been soaring, especially since Japan took it on as an official currency. Demand is up, and will keep going up.
Forex traders often forget that Bitcoin is a factor on the Forex market. It’s the most volatile currency in the world, often swinging hundreds of dollars in mere days. It can be intimidating for this reason, but the trend is upwards, so if you can weather the drops and stick through it, you can make tons of money.
Bitcoin is not for everyone – certainly not for those who are risk averse. But at least consider it. It’s changing the way we see money after all.
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