Things that you should never do in currency trading

 

Every single day the number of active traders in the online trading industry is increasing. The majority of traders are jumping into the investment world due to its lucrative profit potential. However, if you look at the success rate in Forex then you will be shocked to see that only 5% of the traders are able to make money on regular basis. So who are these 5 % of people? These are the smart investors who know how to take a managed risk in the trading industry. Some of you might think that you will buy some professional trading system to become a Forex millionaire. But things don’t work like this in real life trading. You have to learn from your trading mistakes and consider this industry as your business. In today’s article, we will tell you about the things which you should never do as a retail trader.

Never trade the lower time frame
Lower time frame trading is a very risky and only a handful of traders are able to make money. In the Forex industry, you have to work really hard to learn more about the dynamics of this market. It’s true that in lower time frame trading you will have lots of trading signals but this doesn’t mean that you will be able to make a profit in every single trade. To be honest it will dramatically increase your risk exposure in this industry. Some retail traders say that many professional traders in the United Kingdom are trading the lower time frame and making tons of money. To be honest this is 100% true, but you have to consider their trading experience. Most of them have been involved in the spread trading industry for more than two or three years. Experience will always help you make  better trading decisions.

Never risk more than 3% of your account

In the trading industry, you will always have to lose some trades. You might have exact knowledge about spread trading, yet losing trades are inevitable. There is nothing you can do to avoid the losing trades. If you are completely new to this industry then instead of trading with real money use the demo trading account to learn more details. Many traders often consider demo trading as a waste of their time. But over a period of time, you will understand that even the most pro traders in the UK often use demo trading account to backtest their trading system. If you are not sure about your trading system then never take too much risk in any single trade. Always focus on the market data and try a trade with proper risk management factors. Learn to embrace the losing trades and never allow your grid to take control over you.

Never use too many indicators


Indicators are nothing tools to help you. But novice traders love to consider them as their prime trading tools. They simply trade the market using the indicator based trading system and lose a huge amount of money. But to make profit consistently you have to work really hard or else you will never understand the structure of this market. Try to trade in the clean chart using the key support and resistance level. Use the price action confirmation signal to find the best possible trade setup. In spread trading, you need to understand the fact that without having a simple trading system it’s nearly impossible for you to make money. At times you might face series of losing trades but this doesn’t mean that you will start using tons of indicators to filter out the false trading signals. Learn the basic of the Forex market and try to develop your own trading system. Always believe in yourself and trade this market with discipline. Never take any unnecessary risk in trading to maximize your profit factor.

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