1. Trading without a plan
Have you ever noticed that when you head to the supermarket with a precise list of what you need you shop faster and spend less? This point is all about that. Thinking in advance where you want to get and how you want to get there will improve your trading experience instantly.
When starting in a new field like Forex trading, people tend to practice here and there, without a real action plan. And that is OK, but only for a demo account. Once you decide to open a real account, you should set real goals and work in that single direction. Trading without a plan considerably increases your risk exposure, meaning you are more likely to lose money.
2. Relying on a single source
Information is power. You have heard it not once. But have you actually stopped and thought for a minute whether your strategy takes that into consideration? Ahá… exactly. It is time to take the popular phrase and put it to work by reaching out to multiple sources of information.
Don’t be mistaken. We are not telling you to follow every single article in the internet. Start by finding 3 highly reliable sources that provide insights and analysis that could work in your favour. It can be a blog or a even a news channel. The decision is entirely yours, just focus on results.
3. Choosing the wrong time horizon
Why are you trading? As simple as it sounds, many people have never really been capable to answer that question. Are you trading for retirement? Or increasing your capital in the short term? If you want to achieve goals in the near term, then focus on 30-minute to 4-hour charts. If you are working for middle term objectives, then the 1-day to 1-week chart seem a better option. But if you are in for the long term, then 1-month to 1-year are the right ones for you. Choosing the right time horizon and charts will elevate your chances of success, letting you focus on what really matters and polishing the “noise” of charts depending on the timeframe.
4. Becoming a technical OR fundamental ONLY trader
Oh please… Again? We’ve told you not once: technical and fundamental analysis work TOGETHER and not independently. We understand you might like one more than another, but it is important you stay sharp on both fronts because the world is not only about numbers, it is also about political decisions, and trade conditions, and announcements. Words matter.
5. Switching strategies too soon
If you pick up a trading strategy, stick to it for a while. Avoid changing it if things go south a few times. It is normal and it is an opportunity to improve it. Work on it. By constantly changing your strategy you will be losing potential winning trades and you’ll be spending resources effectively.