5 Deadly Mistakes Forex Traders Make

Some fields are lenient and allow you to learn by making mistakes, but Forex trading is one of the few domains where each error made will cost you a huge sum. Foreign exchange, a trading domain with a value in trillions, sees thousands of traders try their hand at currency trading. While the crowd entering Forex is huge, the amount of people who succeed is barely half of that! Along with being profitable, Forex is also an incredibly risky field. The markets here are unpredictable and winning trades on such erratic grounds is no easy ordeal.

Forex Trading

Here are 5 risky mistakes Forex traders make that you should keep from committing: 

1) Trading Without A Solid Plan: 

The trading plan you employ is the heart and soul of the trade. It gives you direction and a clear goal to work towards. Many traders start without the backing of a few good Forex trading strategies. Before you make trades, take ample amounts of time to plan out your trades thoroughly.

2) Risking More Than Affordable: 

Risks can sometimes become unnecessary and unaffordable. As a Forex trader, you have to learn to segregate between healthy and unhealthy risks. When you take a planned risk with the necessary cautions, you will reap well. However, cross the line and there's a price to pay!

3) Lack Of Stop-Loss Orders:

Once you have made up your mind to take risks, placing stops is necessary. Stop orders are mechanisms which when kept in place, will automatically remove your position from a losing trade. Stop-loss orders are extremely helpful when participating in risky trades. Often times it becomes difficult to monitor the charts continuously, during such instances, placing a stop order will prove incredibly useful. The stop-loss will ensure that you don't incur huge losses!

4) Holding On To Bad Trades: 

Not all trades can be won, that's just the nature of Forex Trading. On many an occasion, you will have performed well but the market volatility will leave your trade in shambles! When such bad trades strike, cutting them off then and there is the smartest thing to do. 

5) Not Researching Enough: 

Research is fundamental to trades. Forex is a speculative domain, and to speculate accurately, you have to research market trends and be able to predict its movements. Novices often make the mistake of entering Forex trading without researching enough.

Start trading on a Forex Demo Account today, and learn from the best in the game - WesternFX! Reach out to us and get yourself the best demo trading account. Backed by our experts who will guide you diligently, you will see trading success come by in no time. Call us today to get started! 

3 Major Disadvantages Of Trading Forex On A Small Account

Many people tend to believe that defense is the best offense, and nowhere is this belief more evident than in Forex's markets. Traders often believe that limiting their trades monetarily will also inadvertently help minimize losses. But that's not quite the case. Forex trading, being the volatile market that it is, will bring losses to trades no matter how small! 

 

Additionally, the fact is that not all risks are loss-evoking. Some risks when taken right can bring in stellar profits. This is why risk management shouldn't be confused with minimizing trade potential.
 

Here are 3 disadvantages of trading Forex on a small account:
 

Disadvantages of Small Forex Trading Account

1) Minimal Profits: Small accounts mean small profits, and as a Forex trader, you have to go beyond the point of minimal returns and breakevens. The reason several Forex trading professionals start off with hefty investments is because small trades just don't cut it when it comes to profits. There's an underlying threshold that limits small accounts from crossing a certain level of profits. While this might not bother you early on, down the line, you'll need bigger returns.
 

2) Lack of Money For Reinvestment: Reinvesting is something every Forex trader has to do in the long run. Even if you have a tremendous amount of trading capital, you have to come to terms with the fact that a lot of it will be lost to risky trades, hence the need for reinvesting a portion of the profits earned. Trading small will keep you from reinvesting, because you'll make minimal profits.
 

3) Standard Trade Rates: Be it small trades or big ones, you'll have to pay the same brokerage fee. And since you'll be making smaller wins on your account, paying the broker will seem expensive! These are unavoidable expenses, and you will have to go big or go home after a certain point.
 

The best way around your phobia of large trades is to get a good Forex demo account and practice on it till you're comfortable with bigger numbers. Once you have ample demo practice, facing big trades and taking big risks will be easier. All you need to succeed on currency markets' risky grounds is the backing of good Forex trading strategies and a reliable broker.
 

Reach out to WesternFX today and avail our world-class brokerage! On our Forex demo account, you'll be able to learn to your heart's content, before moving to live trades where we will guide you every step of the way. Backed by our experts, finding success in trades big and small will happen in no time. Call us today to know more!