Sharpen Your Trading Skills HTML version
A gift from COMBO Profit System
1 The Top 10 Mistakes Traders
Make and How To Avoid Them
Achieving success in forex trading requires avoiding numerous pitfalls as much,
or more, than it does seeking out and executing winning trades.
Following are 10 of the more prevalent mistakes I believe traders make in forex
This list is in no particular order of importance.
1. Failure to have a trading plan in place before a trade is executed.
A trader with no specific plan of action in place upon entry into a forex trade
does not know, among other things, when or where he or she will exit the trade, or
about how much money may be made or lost. Traders with no pre-determined
trading plan are flying by the seat of their pants, and that's usually a recipe for a
"crash and burn."
2. Inadequate trading assets or improper money management.
It does not take a fortune to trade forex markets with success. Traders with less
than $5,000 in their trading accounts can and do trade forex successfully. And,
traders with $50,000 or more in their trading accounts can and do lose it all in a
heartbeat. Part of trading success boils down to proper money management and
not gunning for those highly risky "home-run" type trades that involve too much
trading capital at one time.
3. Expectations that are too high, too soon.
Beginning forex traders that expect to quit their "day job" and make a good
living trading forex in their first few weeks of trading are usually disappointed.
You don't become a successful doctor or lawyer or business owner in the first
couple years of the practice. It takes hard work and perseverance to achieve
success in any field of endeavor -- and trading forex is no different. Forex
trading is not the easy, "get-rich-quick" scheme that a few unsavory characters
make it out to be. You must have your own plan and have a precise trading
system, then you practice for a few months before you can actually win in trading
4. Failure to use protective stops.
Using protective buy stops or sell stops upon entering a trade provide a trader with
a good idea of about how much money he or she is risking on that particular trade,
should it turn out to be a loser. Protective stops are a good money-management
tool, but are not perfect. There are no perfect money-management tools in forex