What is the one thing people get wrong when trading forex?
In 2006, I've paid almost ¢5k for a reversal pattern disguise as pip counting. It's literally a 123 top or bottom. The reason behind it is the market only trend less than 30% of the time. So trading a channel with this pattern seems to work.
It didn't work for me.
So I continue and then the age old idiom appears.
That the trend is your friend. And trading with the trend helps you gain an edge.
It didn't work for me until I decide to choose which side I want to be friend with.
What about you? What's your take when you first started trading forex?
The one thing most people get wrong when they come into this business is overestimating themselves and underestimating the markets. Turn that back to front, and with time, a trader might just get somewhere.
Indicators. Most people beleive they get an edge over the market by putting some moving averages up.
My first take was to think I knew what to do, followed a short while (and most of my first account) later by the reality that i didn't! Then there was a period of basically confusion as I tried loads of things and found none of them seemed to work. Then I paused, regrouped and started again in a better way with at least some experience of what doesn't work under my belt.
Eventually, I got to the idea that trading is a probability game and what I needed is a reliable edge plus a structured method with discipline, consistency, risk control and emotional stability to exploit it effectively. My edge is the same as yours - the trend is your friend (until the bend at the end!), never found anything better than that.
calm down one's attitude.
The one thing i did wrong was spending too much time focusing on systems and strategies, and now i came too the conclusion that i completely neglected the most important thing in forex witch is psychology and im still trying to improve that know. If someone is starting now in forex my advice is dont be stupid and focus on improving yourself and the decision making process you will have to do every week. A trader with a bad system can survive for months a trader with bad psychology usually lasts a few weeks.
First. Someone said indicators which I agree. Goldman Sachs is not using any indicator that is offered to the public. Believing that any one indicator is going to be the trick, is not correct.
Second. Too short term. Big trends are where it is at. Getting whipsawed out by what happens over the course of an hour isn't the way to be successful
Thinking that they'll be consistently profitable if they don't have at least 5 years of experience.
Most of people under estimate the market, they feel that forex market not move so quikly or can turn, they can play easily here, but as everything know that forex market run 24 hrs a day....and there is no FIX time to trade. Trade any time with wisely and open eyes.
1) Position size
2) Position size
3) Be different
4) Trade large
5) Don't scalp
6) Find your own way
7) Be arrogant about your ability
8) Be humble about your results
Yes there are contradictions there.
Thinking anything they buy from gurus is actually going to work
Mistakes I have seen people make:
1) Thinking that an EA or indicator will do all of the work for them. It won’t.
2) Not developing a strategy. So simple and yet so many traders just don’t do it. Instead they fumble around, switching from one ‘system’ to the next without ever taking the time to develop, test and refine a strategy.
3) Not accounting for volatility. If you are developing a strategy and have a rule that says (for example) “tp at 10 pips” or “SL at 40 pips” etc, I can practically guarantee that is not going to work in the long term. Why? Because 10 pips in a low volatility period could account for 10% of the daily market movement, while in a high volatility period it could count for only 1%.
4) Using low timeframes.
5) Poor money management. Another very simple idea - Never risk more than 2% of your capital at any time. That super simple rule would save so many traders so much heartache.
6) Underestimating the psychological impact. This often comes to light when a trader moves from a demo account to live, and for the first time experiences the feeling of losing real money. This can lead traders to abandon the rules of an otherwise profitable strategy by (for example) moving stop losses mid-trade or taking profits too early.
Biggest mistake newbies make - they fail to understand that DD and losses are part of the business.
Also, there's a big difference between statistics and indicators
Pursuing pips and profits first, and at all cost while failing to mitigate against preventable losses.
I'm starting to perfect my strategy. If I go long I enter near support. If I go short I enter near resistance.
Stop deleting your commens and grow up lol
Have fun you liar.
© Forex Factory