Disclaimer Futures, forex, stock, and options trading is not appropriate for everyone. There is a substantial risk of loss associated with trading these markets. Losses can and will occur. No system or methodology has ever been developed that can guarantee profits or ensure freedom from losses. No representation or implication is being made that using these methodologies or systems will generate profits or ensure freedom from losses.
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There’s no time as dangerous in your trading career as when you’re just starting out. New traders tend to make many mistakes and many of them lose so much money that they leave Forex forever, believing it’s all a scam. Often, they’re so traumatized that they can’t stand the thought of ever trading again.
To make sure this doesn’t happen to you, I recommend going over the following trading mistakes that many Forex beginners tend to make and making sure you’re not guilty of making any of them:
1. Thinking you know it all – Trust me, when you begin trading you’re practically ignorant. Even if you’ve taken a good course for beginners, like Forex Nitty Gritty, for example, you still know very little about the market and you must develop your experience and hone your skills over time. So, don’t get cocky. You’re still in basic training.
2. Using insane leverage – It’s very tempting to trade with a 400:1 leverage as some brokers offer. However, when you’re using such a high leverage, you’re putting yourself in tremendous risk. A small shift in the market in the wrong direction and your loss will be multiplied by 400. Trust me, this can wipe out a significant portion of your account. Until you become more experienced, stick to low leverages. Up to 20:1 at most.
3. Buying everything under the sun – It’s good to invest in your knowledge and to get some Forex trading tools. However, don’t jump from one product to the next. Make sure you study each course as it should be studied and make use of each method and really master it before expanding your tool arsenal. Beginners tend to try to find the next best thing all the time, but they never stick with any product long enough to see if they’ve really found anything worth using. Don’t make this mistake.
4. Test, test, test – I don’t care how good a product looks or how much it’s advertised to be able to make. It hasn’t worked for you yet, so make sure to test it well. Demo test each new system before moving on to a micro-account and test it some more. Only after you’re sure you have a good tool or system should you begin trading large sums with it.
5. Giving up too soon – Forex is a tricky business and you may suffer great losses, especially in the beginning. However, don’t be quick to give up on yourself. Use losses as learning experiences and work hard on your trading education and skills. Only by being determined will you be able to fulfill your Forex goals.
These are not the only mistakes new traders are prone to make but they’re a good place to begin making yourself a better trader.
Yesterday was a sad day for the British Pound as it dropped to a 9 months low against the dollar and a 1 year low against the Yen.
The main reason is the growing deficit of the British economy and a recent opinion poll of British voters which returned inconclusive results for the upcoming election.
After long years of Labour Party rule, the Conservative Party leader, David Cameron, appeared to be headed for a certain victory in the forthcoming elections which are to be held at the end of May.
The economic situation, the continued war in Iraq (where British forces are still deployed), and various scandals cut away at the support Labour enjoyed over the past decade and marked a return of the Conservative Party to power. However, the recent poll showed that this was far from a certain victory.
Cameron, whose position on spending and the growing deficit shows promise of a more business oriented policy, has lost ground and is now holding on to a meagre 2% lead in the polls. This is well within the statistical margin of error so there is a very good chance that the Labour Party may yet prevail and remain in power.
Should this happen, there may be more asset buying by the government and an even greater deficit, which does not bode well for the Pound.
In any event, it seems that the elections will be a close affair with neither party being able to achieve a forceful majority in Parliament. A minority government (that has not been in Britain since 1974) is unlikely to be able to take the swift and unpopular financial steps that many traders view as necessary to reinforce the economy and bolster the Pound.
This is why the Pound went into a free fall yesterday and why its future remains bleak. All this plays in favor of the USD which is enjoying a nice upward trend over the past few months against the GBP and the Euro.
You may have heard about the dismal statistics that state that over 90% of Forex traders end up as losers. This is not a myth. It’s the reality of trading and something most traders don’t know about.
To help you avoid this fate and join the top 10% of all traders, I urge you to sign up to a special free training session that Bill Poulos is holding this Wednesday on March 3rd.
To accommodate traders from all over the world, he is holding this session on 3 different times:
* 12:00pm Eastern (New York Time)
* 4:00pm Eastern (New York Time)
* 9:00pm Eastern (New York Time)
Click here to register: Smart Start Forex Profit Strategies training session
This session, known as the Forex Smart Start Profit Strategies will help you learn the following:
* How the shaky economy is creating an immense amount of profit potential in the Forex markets (including at
least 5,604 potential pips in just the past few months using some unique techniques he’ll cover during the session.
* How to dramatically reduce your “time in the trenches” trading Forex by spending only 20 minutes a day on the market.
* How to reduce your risk in a trade to virtually zero by one simple profit taking trick. You wouldn’t believe this when you learn this but most traders do the exact opposite.
* How to automatically get an edge over other traders by making sure you only take high probability trades time and time again.
* The telltale signs a market “hurricane” is about to hit, & how to protect your portfolio by avoiding these dangerous & risky market conditions. Avoid crippling losses with these tricks.
* The simple, time-saving, step-by-step mechanics of placing a trade using real broker-provided trading software…
…and much, much more…
As I said, there are 3 separate sessions so you should find one that suits your schedule. Each session is limited in space, so hurry up and reserve your spot:
Smart Start Forex Profit Strategies training session
This is going to be enlightening.
Riding a horse can be fabulous experience… as long as you know who’s doing the leading. If you’re the one who’s determining the direction the horse is going and actually like the destination, then by all means, ride on. If not, it’s time to get off that horse even if it means jumping off before it starts to gallop away and take you to places you just don’t feel like visiting.
The same is true for Forex trading where a lot of traders seem to like riding to places they just don’t want to go and don’t realize that it’s time they got off the horse. I’m talking about Loss Riders, the worse kind of Forex Cowboys there ever was.
Loss Riders simply can’t ever give up. They stay in the saddle no matter what. Even if a trade has gone out of their control and is now cantering away deeper into the red, they stay on, determined to change the tide. More often then not, they’ve lost control of their steed and they’re going to end up losing more. In addition, all that time spent on a losing trade could have been used to find another, a more profitable one.
It’s time you make a decision: what kind of Cowboy do you wish to be? Which Forex Horses do you want to ride?
Losses are horses that should be abandoned (jumped off from) before they start to gallop away. There are finer horses awaiting you, those that will take you where you wish to go. Don’t be a Forex Loss Rider. This is what Stop Loss prices are for, to allow you to disembark from the saddle without having to hurt yourself too much. Cutting your losses short is a basic rule of successful trading. So a Loss Rider is not the kind of Cowboy you wish to be.
What you should be riding are your winners. These take you where you want to go, to a greater profit. However, they will not be doing so indefinitely since every horse has its limits and ends up tired. Don’t be the kind of Cowboy who pushes their horses to exhaustion or until they decide to rebel. You’ll only be making your profits lower.
Always make sure to have an exit strategy for your profits so that you:
a. Never end up without some kind of profit.
b. Know in advance when enough is enough.
Always know that you don’t need to fall in love with any trade. As a Cowboy, you’ll always be able to find new horses to ride on.
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