Thoughts of the Forex Currency Trading Beginner
Being a Forex currency trading beginner is not easy and sometimes it can seem downright overwhelming. Many newbies make a lot of the same mistakes and have some of the same thoughts along the way. Here are some of the most common thoughts that you may experience as a newbie.
I Lost A Lot On That Trade...I'll Just Risk More and Win it Back Next Time.
This is a big problem for newbies in the Forex market. It goes right along with that gambler's mentality that is so common in the market today. When you lose money, you should most likely not increase the risk the next trade to make up for it. This is a trading strategy called Martingale that is actually common with some expert advisors.
Instead of throwing the Hail Mary to get it back, get it back with small wins. Hit a bunch of singles instead of swinging for the home run.
If there were any other sports analogies that I could think of right now, I'd throw those in too. Just don't do this.
I'm Bored...I'll Place a Trade!
Many inexperienced traders think that when they are not trading the market, they're not being productive. While your boss might ride you to try to get more productivity out of you, this is not necessarily the best approach to take in the foreign exchange market. Only take trades when your trading system says to. Don't trade just for fun.
This Broker Has a Cool Website...I'll Go With Them
Choosing a Forex broker should be something that takes you some time to complete. You can't simply go with the one that has the coolest website or the one with the best bonus offer. It doesn't matter if they offer you a $1 million bonus to open an account. If they never plan on giving you the money, it won't matter.
Take some time to research brokers and find one that is reputable. You will be very glad that you did.
I'm Sure the Forex Spread Isn't Really That Important
In some cases, you may be right. If you're trading a long-term strategy and you plan on winning hundreds of pips on a trade, the spread probably isn't a big deal. However, if you're trading a short-term strategy where every pip counts, it is very important. You have to find a broker with competitive spreads so that you can minimize your transaction costs.
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