Dollar Cost Averaging
One thing I see Forex traders do is over trade their account. They may put on a few lots to start with, then they will put a few more lots on hoping that the market will come back for them. They do not even use a stop loss to protect their capital, they just put on more trades to cost average their first bad trade. (Cost averaging is adding more trades so when the price comes back in your favor you will cover your loss faster). The next thing they know they are looking at a margin call and do not have enough money in their account to cover all the trades they have put on going in the wrong direction.
Many times traders will get a hot tip or take the advice from some so called expert while not using their own indicators and judgment on placing a trade. At this point they have a financial and an emotional stake in the trade. They start to lose their perspective on the trade so any good judgment is long gone. The thing that needs to be learned here is to trade with a stop loss, trade with proper amounts of money, and never add onto a losing trade.
5 Free Forex Videos to be Removed - New Trading System Coming Soon
Alright readers, we have some bad news and we have some good news. Which do you want to hear first? Starting with the bad allows us to end on a good note, so let’s start with the bad!
We regret to inform you that we will be removing 5 videos from the Jump Start video Playlist in the the free member section of ForexStrategySecrets.com.
The five videos we’re removing were added after the debut of the original Jump Start Videos. We realize now that they were more suited to be presented in another course. The Jump Start Strategy videos will still be available for after we take down these extra videos on Tuesday, you just won’t have access to the additional “bonus” videos we added in haste.
We apologize we are doing this, but this leads us to our good news…
These 5 videos will become part of a new trading system our team is working hard to create. We’re not sure yet when this system will go on sale, but thanks to the feedback we’ve been receiving from you, our forex blog readers & some of our Facebook Group members, we’re creating a forex trading system that will help solve many of your expressed woes in trading.
What Causes Greed When Trading?
When we have, we want more, and when we have not, we want more. Greed can be caused by both success and failure. When we have some good trades we get in a mindset that the trend will go on forever so we do not get out of the market. We try to get that last pip, but it gets us. When we make a poor trade we try to make up for it and trade too much of our account and trade when the market is flat trying to make up for lost time and money. Multiple lots are traded when one would have been the better trade.
A trading plan with trading rules will help keep a balance between fear, when we lose and over-confidence when we win. First we need to get a direction, and develop habits of doing the right things at the right times. Waiting for the market to tell us when to trade can calm a trader and help to develop patience. Once a direction is set, work on the speed. We classify speed as working less and making more. Things to build up speed in trading will include practice, patience, following the rules, entering on good signals, using good money management practices, planning your trades, setting stop losses, and studying.
Placing the Stop Loss
One of the first things I was taught when I started trading was how to increase my trading by 100% in ten minutes. There were several parts to this formula but the one I want to talk about here is the stop loss. We all need to give the market a chance to breathe. The suggestion was to set the stop loss further away from the entry point than I was doing.
I started to move my stop losses further and further away from my entry point until I found something that works for me. It is not by a set number of pips, or at a pivot point, or a Fibonacci line. I set my stops where the market tells me to set it. Sometimes I am wrong but I am right far more often than not. The above video will show you where I place my stop more easily than with a bunch of words so take a look.
Forex Scams
Don’t fall for one.
One of the first things you must learn about the Forex market is that although it is enjoyable and exciting, there is no magic button that will instantly turn your pennies into millions of dollars. There are companies purposely misleading people into thinking that making money in the Forex is easy and that they have found the “Holy Grail” to making a lot of money with a simple click of a button.
The truth is that no matter how you look at it, education is the only fool proof way to consistently make money in the Foreign Exchange Market. Even after you finish reading through all the information we refer you to, your journey as a FX trader is only just beginning. I have never met a successful Forex trader who stopped learning. There is always something new to learn and you must actively seek out as much information as you can.
The best investment you can ever make is in yourself.
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