Here’s the things you shouldn’t do when trading forex. As you start to learn Forex to becoming a master Forex trader, you have perhaps read numerous how-to guides to trade effectively and profitably in the market of foreign exchange. Nevertheless, in an environment as volatile, liquid and complex as foreign exchange market, it’s evenly significant to know things that you shouldn’t do while trading. This article will tell all about it.
7 Things that You Shouldn’t Do in Forex Trading
Instead of learning the things that you should do while trading in Forex market, it is also significant to know the things that you better not do. One of the things that you shouldn’t do is trading without a plan. You must have heard that many traders fail in Forex because of this reason. Other than that, here are the top seven things to avoid.
#1: Don’t Gamble
If you think that the Forex market is like a gambling platform, you should change your mind immediately. When you are trading Forex, there are some indicators and trends to watch out for your advantage. It’s not about gambling to a position to win the trade. In fact, you should know how to play the game and win the trade by the right trading strategy.
#2: Don’t Allow Your Emotion Control You
It’s no hesitation that humans are an emotional being. However, allowing your feelings only to control you may only devastate your trading career. Because of you have lost too often, it doesn’t mean that overtrading can help you to win back what you have lost. Just because you win big, it doesn’t mean that you should be overconfident to trade more as well.
#3: Don’t Anticipate for Instant Results
Even though trading Forex allows you to receive more money than other investing forms, there is actually still a time-consuming process to go. Coming to the point where you are able to earn consistent returns will certainly take a time, patience and effort. That’s why expecting for instant gratification is similar to let your emotion to control yourself.
#4: Don’t Place Your Stop-Loss Too Tight
Stop-loss is essential management tool for Forex traders. However, placing your stop-losses too tight can only lead you to disaster. Keep in mind to give your trade adequate space to develop. At this point, setting your stop-loss too close will negate this rule. As a consequence, you need to decide the right place which is not too close or too far.
#5: Don’t Approach Forex Robots without Skepticism
This is particularly important for a rookie Forex trader. Remember that you shouldn’t believe every Forex robot or even expert advisor easily in the world of Forex. This is because the market is prone to scams. There have been a lot of people who lose their money since they cannot identify scams, so consider learning how to characterize Forex scams as well.
#6: Don’t Disregard the News
Even though technical analysis is widely used by most Forex traders nowadays, we cannot ignore the importance of fundamental analysis which focuses on the global news. Simply observe the Forex markets after there is a significant economic news release and policy announcement by country’s central bank. Just remember that it will assist you to gain success in the market.
#7: Don’t Pick Broker Carelessly
The last but not least, you shouldn’t pick broker carelessly. For example, you pick a broker just because they offer big bonuses that are nearly too good to be true. Instead of choosing your broker not carefully, you should take time to learn Forex broker better from its regulation to its feature. If you don’t have any good idea, go to a broker comparison site.