The 7 mortal sins of the forex loser
1. Greed
You believe money can be made quickly and easily, as if the market were a bunch of fools willing to unload their money into your pockets. Remember: you’re better off missing wonderful opportunities, then losing real pips!
2. Lack of focus on what really matters
The search for the Holy Grail makes many a novice get lost in the attempt. Most traders waste their time and money seeking the “perfect strategy” which would satiate their greed. Don’t be one of them.
3. Spreading yourself thin
Rookies try to trade as many currencies as they can. Ok. It is good to take a look at many currencies, and learn some basics about them, e.g. EUR/CHF is boring, with low-volatility, or AUD/NZD moves in tight ranges with relatively big spikes. But… Why don’t you focus on just one currency pair? It will help you focus. Get to know one currency pair’s behavior in detail, what it does after such and such news or releases, at what time happens what, etc. You will see you will be less stressed, and will probably start trading better. Once your trading improves, you can decided to trade other pairs.
4. Inadequate Risk Management
You cannot control whether you win or lose, but you can control how much you lose when the market goes against your judgement. What does this mean? It means you gotta place Stops! Place them at the time of placing your order. Make sure you know what you Risk/Reward ratio is at any point in time.
5. Lack of quality training
The internet is a mine of information, isn’t it? Much of it, though, is utterly useless. Spending too much time lurking in huge forums with lots of newbies, trying to learn something from them is worthless.
6. Crap overload
Yeah, there is such a thing, you know. When you pull up a chart and I see a web of colorful lines (indicators) and clouds (Ichimoku) so thick I can’t see the graph of the exchange rate itself, I say “Crap overload”! Have one or two indicators at most.
7. Not following your trading plan
Do you even have one? It’s a must-have! Check mine.
And, what are losers fond of doing? Overtrading, for one. The moment they close a position, they are looking to open another one. They’re impatient with the action they witness on their screens. When the market turns on them, they say “Oh, who the hell are you to turn on me? I’m gonna beat the !!it out of you.”, and they add to the losing position, and so on and so forth… I can talk a lot about it, but why should I? Since most of you are losers, you already know what a loser does, and probably can write a whole book on how to quickly lose your shirt in forex.