Back in 2009 when I started learning to trade there were many things that I could have avoided. These were things that I wasted money and time on. It was totally not worth it. There were also plenty of greedy business men who were keen to get my money despite telling them that I was a new trader. Most of them were Forex or Investment brokers and a few were so called Forex tutors. The worst thing these people could do are that they are trying to scam you.
Trading Forex is already very risky, but so are some of the people in this industry. Although I was quite lucky in the Forex market, I had actually been scammed in the Fine Wine market which resulted in some financial loss. But that is a story for another time.
I wish to share with you 5 traders’s pitfalls which will help you avoid some of the mistakes I have made in the past.
1. Don’t be eager to part with your moneyNo matter how good any offer sounds, never part with your money until you have thoroughly done your homework. So I briefly mentioned about scams. The next comes rubbish Forex trading materials. These could be Forex robots, tradings courses or even trading services and these cost an arm and a leg. Don’t tempted by adverts that say “Trade my system and you can become a millionaire within a year!!!“, or offers such as “Buy my course now, it’s the last copy”.
95% of traders fail, so what makes you think that you can be a millionaire in one year as a new Forex trader ? You got to be realistic and you must not let your emotions make your decisions. Of course there are great resources out there and a lot of them are free.
Forex brokers are also be keen on your money. Again, they will offer you very appealing deals. Deals such as “we give you $200 free if you deposit $5000 when you open an account with us today”. Stay well away from them especially when you are brand new to trading. Most brokers offer demo accounts for you to test out their trading platform. With demo accounts you can practice your trading strategy as well as having a taste of what Forex involves. Only when you are consistently profitable should you trade with real money. Don’t listen to nonsense such as the trading mentality is different when trading with real money. Especially when it’s coming from a broker or a none trader.
Learning to trade Forex can be achieved completely free.
2. Trading Forex is not a get rich quick schemeForex trading is not easy as many adverts convey and don’t expect to make millions with only a few 100 dollars or pounds either. Like with any career, you need to put in the time and effort in order to succeed. If you adopt Forex trading with the wrong expectations you will be emotionally crushed by 2 major factors and these are fear and greed. Not only that, but I am sure you will suffer financial loses along the way too.
3. There are no holy grail systems in Forex TradingAs already mentioned trading is not a get rich quick scheme, this also means that there are no holy grail systems. No trading system on this planet is 100% accurate. You give the same system to 2 person to trade and they will both yield different results. This comes down to the individuals attitude to risk, fear and greed. When you are learning to trade, losing money is unavoidable and this is something you have to accept at the very beginning. With any system you will have losing trades. Like from my journal, some trade setups were good setups but still, they became losing trades. Sometimes it was one losing trade after another. Unfortunately there is no exact science when it comes to Forex trading .
The two strategies that worked for me were price action and supply and demand. As you may be aware I currently trade price action off big round numbers. When I discovered price action, I saw significant improvement in my trades. Before I discovered those two strategies I have spent a fair amount on various trading systems and robots etc. If I had known I wouldn’t have wasted all that time and money.
Although there are no holy grail systems, don’t go jumping from one system to another otherwise it could be costly. I recommend price action trading. There are plenty of great resources out there a lot of them are free. Also a lot of price action strategies could be purchased for reasonable prices. Whereas supply and demand courses can cost a bit more. Obviously I cannot guarantee that those strategies will work for you. But I will definitely recommend those to the me 5 to 10 years ago. Find what works for you and stick with it.
4. Avoid Forex Trading RobotsAnother quick way to blow your account is to use Forex Robots. From experience they do not work. That’s even ones that could deliver consistent results on the developers accounts. Even with robots no two accounts will end up the same. They have no emotions and they do not care about the hard work you’ve gone through to earn the money. So long as the criteria matches, a trade will trigger. Whether you are risking 1% per trade or not it doesn’t matter as you can end up with 10 or more trades risking way more than you should. Robots can work for a while but all of a sudden they can wipe your account in 1 or 2 trades. Forex robots are not designed for all marketing conditions.
Forex Robots are not cheap and some are subscription based. For the robot to work you must also need to constantly leave your pc on. Or you can use a vps (virtual private server) on a monthly subscription.
I have never heard of any successful traders using robots.
5. Not digging deep enough for the free quality resourcesAs I stated earlier, learning to trade Forex can be free and that there are plenty of great free resources out there. I don’t blame anyone for having a hard time finding these. This is because the big Forex companies pay to have their adverts appear on 1st pages of many search engines, hiding away all the great free content.
