On the outset, Forex trading seems incredibly rewarding, and in all fairness it is. However, all but few talks about the risks currency exchange carries. At the end of the road lie immense riches, but pitfalls come in plenty! Forex traders in India fail to notice these pitfalls, and rush to make profits. Just as right moves will reward you, wrong ones will cost a good sum. Luckily enough, mistakes made in Forex are usually ones that recur, and you can avoid these on your path to success!
These 4 mistakes are the most common and should be avoided while trading currencies:
1) Trading Without an Aim: You can’t consider getting rich as your goal; while it can be one on the long-term, you need to have immediate milestones to reach! Forex traders in India often participate aimlessly and end up losing all their winnings. Keep small goals to achieve. This can be something as little as making $10 of profits, all the way up to having a win-streak of several profiting trades!
2) Risking Beyond Limits: While Forex trading in India, you will need to take risks mt4 if you want to see profits; however, taking risks can also result in big losses. The key is to practice balance. Risking unnecessarily either by overinvesting or leveraging more than required will seldom yield well. Obey the risk ratio of 2%, where you only risk 2% of your trading capital per trade. This discipline will get you through difficult trades easily!
3) Not Cutting Losing Trades: Holding on to a trade that is bound to go down does no good. Agreed that sometimes, out of volatility, sinking Forex markets take a drastic turn and start rising, this scenario doesn’t happen always. More so than less, losing trades go all the way down! Forex trading beginners have the tendency to hold on to losing trades, expecting it to turn around in their favor. Cut your losses as they come, and move on to the next trade.
4) Lack of Stop Order Placement: If cutting losses is something you find difficult to do by yourself, let the stop-loss do it for you. By placing these mechanisms on your trades, you will get withdrawn as soon as a certain amount of loss has been incurred. This order is meant to curb your losses and keep your account from getting blown up. Place stops precisely; they have to power to keep away losses, but when placed improperly, they will throw you out of a trade before any profit is made!