11. Exiting Trades Poorly – If you put on a Forex trade and it’s not working make sure you exit properly; don’t compound the damage. If you’re in a winning trade don’t talk yourself out of the position because you’re bored or want to relieve stress; stress is a natural part of trading; get use to it.
12. Trading Too Short-term – If you’re profit target is less than 10 points don’t do the Forex trade; the spread you pay to enter the trade makes the odds way against you when you go for these tiny profits.
13. Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and you’re results will improve.
14. Being Too Smart – The most successful forex traders I know are high school graduates. They keep it simple and don’t look beyond the obvious; their results are excellent.
15. Not Trading Around News Time – Most of the big moves occur around news time.
The volume is high and the moves are real; there is no better time to trade forex fundamentally or forex technically than when news is released; this is when the real money adjusts their positions and as a result the prices changes reflect serious currency flow (compared to quiet times when Bank traders rule the market with their customer order flow.
16. Ignore Technical Condition – Determining whether the forex market is over-extended long or over-extended short is a key determinant of near time price action. Spike moves often occur when the market is all one way.
17. Emotional Trading – When you don’t pre-plan you’re trades essentially it’s a thought and not an idea; thoughts are emotions and a very poor basis for doing trades. Do people generally say intelligent things when they are upset and emotional; I don’t think so.
18. Lack of Confidence – Confidence only comes from successful forex trading. If you lose money early in your trading career it’s very difficult to gain true confidence; the trick is don’t go off half-cocked; learn the business before you trade.
19. Lack of Courage to Take a Loss – There is nothing macho or gutsy about riding a loss, just stupidity and cowardice. It takes guts to accept your loss and wait for tomorrow to try again. Getting married to a bad position ruins lots of traders. The thing to remember is the market does crazy things often so don’t get married to any one trade; it’s just a trade. One good trade will not make you a trading success; rather it’s monthly and annual performance that defines a good trader.
20. Not Focusing on the Trade at Hand – There is no room for fantasizing in successful trading. Counting up and mentally spending profits you haven’t made yet is mental masturbation and does you no good. Same with worrying about a loss that hasn’t happened yet. Focus on your position and have a reasonable stop loss in place at the time you do the trade. Then be like an astronaut – sit back and enjoy the ride; no sense worrying because you have no real control; the market will do what it wants to do.
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