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Forex Trading: Top 5 Beginners Mistakes To Avoid

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Forex Trading: Top 5 Beginners Mistakes To Avoid

Hey hey what’s up my friend so in today’s episode I only share with you share with you right the top 5 mistakes right there most forex traders mix most beginning forex traders make number 1 hey Rainer I want to make 10 pips a day men Rainer I’m not greedy all I’m asking is just 10 pips a day after all right the pound dollar moves hundred pips a day all I want is just 10 pips I’m not greedy now here’s the deal it doesn’t matter whether you wanna make two peeps a day five pips 10 pips 50 pips in order for you to make X number of pips a day it means that your trading strategy has to work right it has to to be able to take advantage of certain market patterns right now certain market conditions for example if the market is in an uptrend and your trading strategy is a long strategy that you know bias breakouts you know buy high and sell higher you make money you maybe if you buy the pullback you buy it on the retracement and you sell higher you’ll make money right because the uptrend market condition is suited for that trading strategy that you’re using so yes you make pips you make money but guess what market conditions they change it could be in an uptrend for the last five days the last ten days but it’s not gonna go up forever you are eventually going to range am I going to a downtrend and here’s the thing you never know when that will happen so yeah you could be making no pips consistently for 4 5 6 7 8 9 10 days but when market conditions change your trading strategy is stopped working and guess what you’re not gonna make you know that consistent X number of pips each day again okay until you can adapt to the new market environment the new market condition ok so first and foremost I don’t focus on making X number of pips each day instead you should focus right on making money that’s there someone definitely err but when your losses camera you should also focus on containing those losses such there you know you make good money on the good days and you have enough right for the rainy days right that’s how this game is played right it’s not about you’re making every day a certain number of pips because that’s that’s just not gonna happen number two right a mistake that many traders make is that they think that they can treat full time with $1,000 account because there’s this thing called leverage right you can leverage your thousand dollars trading account leverage 1 to 500 so in essence you’re controlling $500,000 worth of currencies well if you haven’t realized it by now leverage is a two-edged sword right yes you can make more money because you are controlling more money well technically you are not really controlling what appears the illusion that you’re controlling more money by at the same time right you can also potentially lose more money your losses I can even be amplified and go against you fastest had you not use leverage so don’t get the wrong idea that just because you have leverage just because you know you have a one two hundred one to five hundred leverage you can trade full-time with four thousand dollars account that’s not gonna happen again that’s because when your losses come right it can easily wipe out your profits and more so don’t don’t have the fixed idea of you know a thousand dollars it’s all in it you really need much more than that right to to treat full-time and on top of it we also talking about having the skill right to be come a consistently profitable trader that’s something that’s required as well not just the size of your comp the thirteen right most new traders they focus a lot on indicators after all indicators are sexy right you look at your chance and line goes up and down right that’s fun that’s exciting but take a step back and think right how are those indicators derive on your chart if you think about this right indicators they are derived most of them are from the price either from the open high low close from the price so when you apply a mathematical formula to the price that’s where you get your indicator value and when you see your indicator values and you use it to make buy or sell decision you are usually one step behind someone who can just read off the price charts so I’m not saying indicators are bad they have their users like you know in trade management trailing stop loss and stuff like that but if you only solely look at indicators to make your buying sell decisions right then hey right that’s your you have to understand that you always be one step behind someone who can just read off the may cut price chart all right so that’s the thirteen the fourth thing right there many new traders do right a mistake is that name micromanage their trades for example let’s say you’re a trader who trade off the daily timeframe right you have a valid trading signal you go long you buy and what happens is that you start to get anxious or the market stalls or it’s not moving very much retraced slightly against you and you and you start to panic you start to sweat so what do you do well you you start to you know analyze the price action more deeply you go down to the five minute timeframe and see how the price section is like and clearly reading from the daily time frame which is your entry and you go down to a five minute time frame to look at the price section you’re gonna get scared out of the treatment because the retracement against you on the daily time frame we look like a freakin down train on the five minutes chop anything or the movies over the Train is over let me get off the tray let me you know take these small loss and move on move on and the next thing you know the market reverse rally and you hit your target profit and that’s because you were micromanaging your trades so here’s the deal right if you trade off the daily time frame the lowest time frame that you want to manage your trade it’s on a daily timeframe right don’t go down to the 5-minute don’t go down to the fifteen minutes because more often than not you’ll scare yourself out of the tree okay and the fifth and final thing that I want to share with you is that many new traders make the mistake of just focusing on their winning rate after all they think they’re winning rate is everything right I’m looking for strategy with a minimum of a 70% win rate 80% win rate now here’s the thing right you can have a 90% winning rate strategy but in the long run you still lose money you might be wondering hear me now how is that possible very simple right let’s say you have an strategy that wins and my times out of ten each time you win you win $1 but at one time when you lose you lose $50 if you do the myth that one loss right will more do more than wipe out all your open profits that you have accumulated over time for all the profits then you have booked overtime so that’s why you shouldn’t just focus only on your winning rate you should focus instead on two things number one your winning rate and number two your average gains right to enrich losses otherwise known as your risk to reward ratio that’s what right will give you the complete picture because number one you know how often you win and number two were you know how much you win when you’re right and how much you can lose when you’re wrong and that gives you a good complete idea right – whether you have a niche in the markets okay so focus on this all right so with that said right I hope this this episode helps I think some of you want a quick recap so number one again forget about making X number of people each day because that’s not how it works instead focus all right on trading well right making as much money as you can when market conditions are favorable to you and and playing good defense right when market conditions turn against you that’s number one number two forget about trading full-time with a thousand dollars account or finer 500 others account right just because you think you have leverage doesn’t mean that you know you can stretch that account right to to whatever needs you wanna it’s not gonna happen okay number three when you first started trading right when you first start trading don’t focus on indicators focus on the price all right because the indicators are a derivative of derivative of price once you understand right how the price protection works then yes you can look into indicators right to make your life you know easier right to simplify certain aspects to be like trade management risk management etc fourth thing right don’t micromanage your traits right if you trade off the daily timeframe the last thing you want to do is go down to a lower timeframe like the five minutes timeframe to micromanage your trade because you’ll probably scare yourself out of the tree and finally the fifth thing is don’t just focus on your winning rate right it’s your winning rate combined with your risk reward that’s what gives you the full picture so that’s it I wish you good luck and good trading I’ll talk to you soon you

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