Avoid losing Money one of the main or key feature in trading life
1. Wrong Broker : A lot of forex brokers are horrible; get a good one. Read forums and chats in several different places to get an unbiased opinion.
2. Trading During Off Hours Bank FX traders, option traders, and hedge funds have a huge advantage during off hours; they can push the currencies around when no volume is going through and the end game is new traders get fleeced trying to trade signals. There is only one signal during off hours it is better to stay out.
3. Trading Against Prevailing Trend There is a huge difference between buying cheaply on the way down and buying cheaply. What was a low price quickly becomes a high price when you ‘re trading against the trend.
4. Picking Tops and Bottoms – Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and your results will improve.
5. Not Trading Around s Time : Most of the big moves occur around news time. The volume is high and the moves are real; there is no better time to trade fundamentally or technically than when news is released; this is when the real money adjusts their positions and as a result the prices changes reflect serious currency flow (compared to quiet times when bank traders rule the market with their customer order flow).
6. Ignore Technical Conditions : Determining whether the market is over-extended long or over-extended short is a key determinant of near-time price action. Spike moves often occur when the market is all one way.
7. Lack of Confidence Confidence only comes from successful trading. If you lose money early in your trading career it’s very difficult to gain true confidence; the trick is don’t go off half-cocked; learn the business before you trade.
8. Being Too Smart : The most successful traders I know are high school ****uates. They keep it simple and dont look beyond the obvious; their results are excellent.
9. Stop Losses : Putting tight stop losses with retail brokers is a recipe for disaster. When you put on a trade, commit to a reasonable stop loss limit that allows your trade a fair chance to develop.
10. Relying on Others : Real traders play a lone hand; they make their own decisions and dont rely on others to make their trading decisions for them; there is no halfway; either trade for yourself or have someone else trade for you.
11. Too Many Charity Trades : When you make money on a well thought-out trade, dont give back half on a whim; invest your profits from good trades on the next good trade
12. Too Much Detail : If you are trading more than 2 indicators, then you need to clean house. Having many indicators stifles trading and finds reasons not to trade. A setup and a trigger is all you need.
13.Overconfidence : Trading is not easy; statistics show a 95% failure rate. If your doing well dont take your success for granted; always be on the lookout for ways to improve what you ‘re doing.
14. Knowledge Deficiency: Most new forex traders do not take the time to learn what drives currency rates (primarily fundamentals). When some news or a statement is due out, they close out their positions and sit out the best trading opportunities; they are taught to only trade after the market calms down. So essentially they miss the whole move and then trade the random noise that follows a fundamental price move. Just think for a moment about technically trading the aftermath of a price move; there is no potential.
15. Rumors : Rumors are rumors almost 100% of the time; think about where in the motion you heard the rumor. If EUR/USD is up 50 points in last 15 minutes and the rumor is dollar negative, well then you missed it. Whenever you trade, determine where in the motion you are entering.
Hope its will help all of you..