3 things Forex traders should never do

Currency markets can be a very daunting place to be, especially if you are a new trader. However, it is not just new traders who find the market so daunting; it is also the professional trader. No matter how successful a Forex trader is there is always a chance that success can suffer if they don’t stick to what they have been taught during Forex training. For this reason, below are 3 things Forex traders must not do if they want to stay successful.

Double up after a losing streak

Losing is a part of trading. The sooner traders realize this, the better. Despite this, it is not betting. In the same way that a sales person will not win every business contract after every sales pitch, traders cannot profit in every trade. However, after a losing trade most new traders get flustered about the fact that they have lost money. To remedy this, their instant reaction is to re-collect that money; and rightly so. The way in which it is done however, is where mistakes are made. Professional traders decrease the amount if investment in the next trade so that the risk is minimised if a losing trade strikes again. Within a few trades the lost capital is back in the account. New traders do the opposite. They double up the investment in the next trade with the idea they will recover loses much quicker this way, only to suffer from another loss that further digs a hole in their trading account. This is not the way to trade. Risk is always the first priority and capital should be controlled to minimize it in every trade, no matter how big loses or profits are.

Keep changing strategies

This is probably one of the most common mistakes. As soon as it gets too hard to complete a strategy, mistakes are made or the strategy keeps causing loses most people tend to leave the strategy and move onto a new one. The reason why the strategy was chosen in the first place is because it suits the person’s personality. If that strategy is mastered, trading can be very rewarding and seamless. Instead of fulfilling this feeling, new traders create more work for themselves and even if they master the latter strategy, they do not enjoy using it.

Blame everybody else

This is probably one of the easiest things to do – the blame game. Emotions can run high when things do not go our way in the currency markets. If we lose a number of trades we tend to always look for other factors to blame our Forex brokers, news or anything else other than ourselves. Even if a major news release comes out and forces our trade the other way we say that it is the market’s fault we lost that trade. The fact is that the market is always right, even if you think it was only right up until the point it reversed. If there is a risk of reversal during a news release we should always think to take ourselves out of the market. It is as simple as that – no excuses.