Four Critical Mistakes in Forex Gold Trading
In my years of trading spending in Forex, I have observed that newbie traders and even expert traders have some common mistakes while trading Forex. I even eventually time by time inform people for these to avoid as well but lets today once again revise them and promise yourself that we will not be the victim of it again, after reading this I am sure you will be able to identify the mistake and hope so stop them before they wipe your account.
Greed is a very common factor. Majority of the traders want more and more and infact they lose what they have. Let suppose all most every day while guiding traders I advice them to move there stoploss to at least break even once your trade becomes in profit, what will happen with that ? worst case your trade will get close by giving you no profit at all,,,, its good thing, because you even did.;t got loose, and that’s more important to avoid from the losses , and few major mistakes are :
- Overload your account
- Poor money management
Forex will never ever make you rich in one night, it take years of experience before you decide to leave your full time job and wish to be a full time traders, mostly I have observed that today you opened account with forex broker and tomorrow you wish to buy a german cars or desire to have full furnish home.
Forex trading is a proper career, its never ever a get rich quick scheme. If you want to be rich overnight, hit the casinos. You have a better chance of winning there.
I have observed Some newbies trade demo accounts for few months and win almost all trades and they seems to be ready to come to Real Account, but as soon as they deposit the money in real account, they start loosing, the fact is that they never come across the feeling of fear on demo account, so they trade with open mind, and its psychological effect that when you will do something without fear, you will do it perfectly, but once you have fear in mind, 99% chances are there that you will never accomplish the task at all, becoz you are not able to use full of your mind, as fear already occupied it, so now when they come to real account, there panic level starts, sometime there trade come to hit stop loss and they move and more away ,, and it goes on and on, just because they don’t want to quit it, or few traders I have seen they even don’t put stop loss at all,,, and once trade comes in red they never ever close it, and in result it gives them more and more panic, and finally cause them to wipe out the account.
Get rid of the fear and losing money, free up your mind, because fears will never give you anything, and hence its true that they will cause you for more panic.
Make a strategy and put stop loss at the maximum level which will take your trade out if your strategy fails, if it fails its fine, let the trade hit the stop loss, even professional traders with experience of more than 20 years makes the loss, its forex no body can be sure, but dare to accept the loss rather than waiting for some miracle to happen and waiting for price to go back.
Every expert trader has lost money. Make sure every trade will not be profitable. Make sure Price never works in your favour always, and sometime even you cant hit a single trade in profit, but that’s fine, as long as you are learning from your mistakes. This will makes you better trader, honestly telling you I blew my first five accounts ending up on margin call in start of my career in trading, but I learnt it , I found the reason why its happening, and the first thing as I am sharing with all of you today is the FEAR.
- Accept your Mistakes
I know few traders personally and may be it better fits on almost all new traders, we enter a trade let suppose Buy Gold 1100 and stop loss 1095 targeting 1110, now what happens that market is getting low and low, and once it comes near 1095, they move the stop loss to 1090, once it reach to 1092 they move the stop loss to 1085, and it goes on and one and even price reach at 1080 and still they are move stop loss to 1075 and promised himself that it’s last time I am moving, and unfortunately price hit the 1075 and they end up on losing a huge portion of their equity,
What was the problem ? problem was that he is not willing to accept that he enters a wrong trade, still hopeful for some miracle to come to correct his mistake, and that is like killing yourself, as I said its fine to get hit by stop loss in start because it will save you from big losses, learn from the mistake and open another trade on sell side, and same trade will give you profit in spite of huge loss,
I saved this for the last point to discuss, Discipline matters a lot, I know few traders that make one strategy for a day and then trade according to that, and once it fails they apply another and another and in result a huge loss, for example today we decided to be bullish on Gold, we open one trade at 1100 now market falls down, put another trade at 1090 for again buy,,, price is going more down and little retracement comes at 1080 to 1085 and put another buy at 1084 while hoping that this is turning point of price, and soon they found price fall down even more harder to 1070. Now not a single trade ends up on loss, they multiply it.
The other main players on this point who just open trade because they read somewhere or someone shared his her view on forum or blog that this has to happened they opened trade for that as well, than another rumors and open another trade for some other pair, and finally when they look at their account there are more than 10 open trades in their account, and now even cant open more, so just waiting for miracle to get close these trades,
A trader must have to be Disciplined , make a plan act according to that, if it fails its ok, and make another plan in which you consider the mistake you did last time and go for it again, this will helps you to end up on becoming a GOOD trader.
Finally My advice to all Traders that don’t open multiple trades, maximum Two or three is enough, and observe your strategy for that trades, because this is how you will identify your mistakes, if you rush you will never get to know what mistake you did for that trade,
At the Last one word that Trading is not Gambling, it’s a proper full time career, the more you learn, the more you will polish yourself and finally you will be GOOD TRADER.