Starting off, foreign exchange can be confusing and very challenging. From using trading accounts to managing stop orders to devising strategies - Forex is no joyride! However, it is one of the most liquid markets, with over $5 trillion trading value and immense prospects of profit. Several traders fall for its leveraged nature and end up losing huge sums of money in a blink. Don't enter Forex trading without ample practice and experience; else, losses are guaranteed!
Avoid these 3 mistakes while Forex trading (currencies):
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| Forex Mistakes that You Should Avoid |
1) Choosing A Bad Broker: Brokers facilitate trading, are responsible for guiding you through the entire process and help you achieve profits. A huge mistake beginners make is partnering with the wrong broker. Several agents claim 100% profits and huge returns, and novice traders fall into this trap easily! Additionally, they are responsible for providing trading platforms to work with. These have to come loaded with market analysis tools to help trade better. A bad brokerage firm, however, will provide an average platform which offers no benefits. Be wise while choosing your broker, and test the trading platform before availing!
2) Taking Too Many Risks: It is true that to succeed in Forex trading, you have to risk. However, there is a fine line that segregates the health risk from its catastrophic counterpart. Traders have the mentality of thinking how much they could have gained by risking a trade when instead, they should be thinking about the losses that could have incurred! Professionals always advise to never invest more than 2% of your investment capital. Don't get carried away by the lucrative nature of online trading, invest small and keep risks to a minimal.
3) Sticking To Short-Term Trades: Typically, longer trends yield stronger outcomes. 5 minute and other similar small-scale charts can't predict the future of a trend. This is why Forex traders are advised to keep a long-term trading mentality and not stick with day trades. Additionally, short-term trends need a lot of focus and precision; since they commence and end within an instant, spotting and capitalizing on an uptrend needs a lot of experience!
Though tough initially, once you understand market movements and how to speculate, currency trading will be incredibly fun and profitable! Want to transition into a pro Forex trader? Partner up with WesternFX! Make the most of Forex trading in Sri Lanka with our world-class brokerage and stellar trading platforms. Call us today to know more!
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