Traders lose less money recently but this still occur in forex trading especially for some newcomers. They tend to leave the market right after some failures in trading due to the thought they are not born for this or the forex brokers make money right from their wallets. Believe me you may not be one of them if you strictly follow the following rules to prevent similar mistakes of those beginners and know what is the most important factor in forex trading.
Lack of experiences
Similar to other trading market, you must practice much in forex trading to understand the system and gain more experiences. The things is with forex trader it may cost you a large amount of money to learn very basic steps.
You can use some demo of trading platform to practice your skill without losing real money. But the ratio between a trial platform with a real platform is quite significant so you cannot master your trading skills with only a demo account. In this trial you can learn how economic flow and political condition affect on forex trading value without real capital.
But learning from trials are difficult and require you to consider it as real market. You have to consider this platform as a real market with real money and real capital. For instance, you think this is not real money so you deposit a very large amount of money at about $50,000 to fill in 10 lots. You should use this time to get used to the system and practice then you can go to live account later.
Do not have a fixed trading strategy
One of the most important factor in forex trading includes a must of deciding your own trading strategy. There are only two basic steps in a trading plan: setting your purpose and planning every trades you want to do. You must answer these following question:
- What types of market you trade?
- How long you want to do trade in market?
- Do you have your own plan of risk controlling?
You should state an exact time to earn an exact amount of money in forex trading. Also, you should decide how you want to leave the trade in terms of exit strategy. Limitation of trading including the entry and exit amount can be defined by exit strategy. This strategy is also called as order management.
Desire to gain much money while do not have any control
I can say you will get more greed over the time of trading. Protecting your capital is the most important factor in forex trading you must know to win for a long-term period. Having a loss’ bar and enlarging the profits are what you should consider because even when profit’s rate is 50% you would still earn more profit than loss. To do this you should control your money strictly. From where to learn forex trading, the most important factor in forex trading is from yourself not from the outside world. If you control well your action, you will perform well in forex trading.