Norah Amboko

Common Mistakes to Avoid In Forex Trading Success in forex trading is dependent on personal efforts especially in selecting the right strategy, honing the right skills, and interpreting the signals. Despite a lot of information that outline the tricks that currency traders can apply to succeed, a big portion of the people still make huge losses and even exit the market never to return. This post is an account of the main mistakes that you should avoid in forex trading. Averaging down Many forex traders often fail when they try to average down. Though some never intend doing it, many are the times when they end up doing it. The main issue with averaging down is that you hold onto a losing position. This means that you are sacrificing money and time. These two resources could be directed to a different area to generate better results. For the capital lost, a lot more will be required to get everything back to the winning level. For example, if a forex trader lost 50% of the invested capital, it will require about 100% to spring back to the original capital level. This mistake is mainly done by day traders and those taking shorter trading time frames. To avoid this mistake, you need to capitalize on opportunities and exit bad trades as promptly as possible. Pre-positioning for moves after every news Forex traders understand events that have great potential for moving the market. However, such directions are not evident in advance. For example, a Forex EUR USD trader might be aware that the Federal Reserve will raise or lower the interest rates. While there are specific expectations attached to such announcements, carrying them directly to forex trading is a great mistake. In most of the cases, there are forward-looking figures and statement indications given by news announcements that could render a trader's argument illogical. When such announcements are made, the currency market surges and every type of order will be on the market. This triggers a stop on both sides that results in serious whip-saw actions before the real trends can emerge. Instead of taking a position, it is important to be more analytical by following your forex trading indicators and interpreting the signals appropriately. Do not sit back and think that such announcements will result in easy money. Such a move will be a recipe for a huge loss. Entering the market without a strategy Though trading in the forex market promises great rewards, starting to work without a proper strategy is a great mistake. Once you sign up for an account, you have to settle on a specific strategy and come up with an operational plan. This is perhaps the most difficult parts for those who thought it would be a get rich fast venture. The strategy entails creating a set of rules to follow and how to apply various indicators and signals. You also have to draw a money management plan that includes a proper plan for mitigating risks involved. If you have the right strategy, rest assured of withering even the toughest times of forex trading. Holding unrealistic expectations Many people often fail in the forex market because they put very high expectations on the market. What you should know is that the market does not even know you are there, but progresses normally following the forces of demand and supply. In fact, the market can at times be very illogical, volatile, and choppy on its short, medium, and long-term cycles. Do not in any way consider isolating any of the market factors and thinking of how to benefit from it. It will not work. It is important to learn all the trends and carefully follow the signals to make the right moves. Your focus should be sticking to a forex strategy, mastering it, and ensuring to make the best moves as opposed to holding unrealistic expectations. For example, you should learn to work with a small percentage of your forex capital and take corrective measures to counter all the possible risks. Meta keywords Forex trading indicators, whip-saw actions, Forex EUR USD, Pre-positioning for news, forex trading strategy. Meta description Succeeding in your forex trading will be realized when you perfect the adopted strategy, acquire the relevant skills, and hold the right expectations. Once you have opened an account, you also have to progressively learn and more importantly avoid the following four most dangerous mistakes in forex trading. (1) Holding unrealistic expectations (2) Entering the market without a strategy (3) Pre-positioning for moves after every news (4) Averaging down Forex Indicators That Every Trader Should Use To succeed in forex trading, you must adopt the right strategy, develop appropriate skills, and maintain a lot of patience. More importantly, you must understand and utilize the forex indicators that tell you when it is right to make a move. Well, on indicators, you must get it right to spot every signal that points to an opening door or about to close to buy or make a sale. Many forex traders keep their eyes wide open anticipating for that perfect moment that will help them make the best. However, no single correct method will make you succeed in forex trading. As your eyes remain trained on the main forex trading signals such as Gold price forecasts, EUR/USD Forecast, USD/JPY forecast, Crude oil prices, and Stock Market Analysis among others, you have to use all the indicators correctly. In this post, we explore the main forex indicators for you. 1) Leading Indicators (oscillators) These are indicators that help to pick preliminary signals. This means that the indicators can easily place you on the market well ahead of the time to make a potential move. The problem with the leading indicators is that they mainly point to false signals. It is, therefore, very important to combine some indicators to get the perfect signal on time to make a make a move. Many traders apply the trend following and trend confirming tools to avoid following the wrong signals. While the trend following tool will preliminarily tell you whether to take a short or long position the confirming tool will point the point at which to make a move. 2) Stochastic indicator This indicator was designed by George Lane and has become one of the most popular in forex trading. It is applied to determine when the market has been oversold or overbought. To put it differently, the indicator helps a forex trader to know when a currency has been overbought and, therefore, a correction is likely. The stochastic indicator comprises of two lines that move and work together. Besides, this indicator comprises of two zones; the upper zone (overbought area) and lower zone (oversold area). If the 2 lines enter the lower zone, the indicator gives an oversold signal, and you can target purchasing the currency pair when the signal shifts to the upper area. If the two lines go to the upper section, overbought area, you should wait until the pair shifts downwards to start selling your currency pair. This indicator is also applied when using divergence forex trading. For traders who carry their analysis using stochastic, it is evident that the price and indicators are always moving in opposite directions. These are called bullish and bearish trading divergences. For example, if you get a bullish divergence between the stochastic and price, a trader can anticipate price increase. The opposite is actually true when dealing with a bearish divergence. 3) Relative strength index The RSI index is in many respects similar to the stochastic oscillator because it also gives a clue on oversold and overbought conditions. It also helps to point at divergences. However, unlike the stochastic that has two lines, the RSI only has one line. The line may enter the upper (overbought) or lower (oversold areas). Every time that the RSI line gets into the upper section (usually above the 70 reading), it gives an overbought signal. This is the best time to sell a forex pair as the line starts getting out of the overbought area. If you get the RSI line getting to the lower section (below 30), it gives an oversold signal, and you should consider buying your preferred pair as the line gets out of the area. The divergence using the RSI indicator can be interpreted the same way one does with the stochastic. At times, the bottoms and tops of the RSI and price diverge giving bearish and bullish divergences. The bearish divergences point to downward moves while bullish divergences forex signals forecast upward moves. 4) Lagging indicators Just like the name suggests, these indicators delay. This means that the forex trading signals come after the respective event and, therefore, only serves as confirmation and not necessarily a forecast. Unlike other types of indicators, the lagging indicators have the advantage of giving true signals. However, they keep you waiting, and you are likely to miss important opportunities. 5) ADX (Average Directional Index) ADX is a common technical indicator used for trend analysis. The indicator helps to demonstrate how strong or reliable a given trend is but not giving the direction. It only hints at the trend strength and is considered among the best indicators because of ease of use. Immediately you open a forex trading account; this should be one of the indicators to start using. A forex trader should always consider values above 35 to 40 as signals for very strong trend and contrary for those below 30. In fact, anything below 20 is considered a non-trending market. 6) Bollinger Bands These are technical indicators that are based on price volatility. It is very simple to interpret because it has an upper and lower band. Besides, it also has a simple moving average. If the two bands are very close, the currency pair is considered to be in a less volatile environment. However, when the pair is far apart, it means that the currency pair has gained momentum and price volatility. Meta keywords Forex trading signals, Gold price forecasts, Stock Market Analysis, Crude oil prices, false signals, bearish divergence, bullish divergence, technical indicators, forex signals Meta Description To handle the complexities of forex trading, forex traders use various forex trading indicators to get the right forex signals to make the right move to buy or sell their currency pairs. This post brings you the main forex trading indicators to demonstrate how they work and why every forex trader should use them. (1) Leading Indicators (oscillators) (2) Stochastic indicator (3) Relative strength index (4) Lagging indicators (5) ADX (Average Directional Index) (6) Bollinger Bands The Most Effective Tricks of Learning Forex Trading Online The secret to success in online currency trading is mastering all the skills and adopting the right strategy. However, every expert forex trader will tell you that burying the head in books will only clear the theoretical part but yield less in the real application. This brings newbies to the main question that every forex trading enthusiast harbored at some moment; what is the best way to learn online currency trading? Make learning progressive The rule of the thumb in forex trading is that there is no single correct method that everybody can apply to succeed. It is because of this that every trader has to understand various strategies and pick what he deems best. To learn, you must make it progressive in the following ways; Appreciate that forex trading is not about a sole target (goal) but about getting it right on the processes. Focus on learning a new lesson in every situation on your forex trading endeavors. Follow top online forex trading expert to learn new lessons. Join online forex trading communities While it might sound really easy to talk about online forex trading strategies or key indicators, the fact is that currency trading is more complex. The best way to learn and apply every concept is being part of online communities. These communities are comprehensive and will nurture personal ambition until you become a pro online forex trader. Because online communities are very motivational, you can link with other people at the same level and move together. Besides, the top experts will tell you they also started at the same point but withered all the challenges to become successful. Therefore, every moment you feel like the move you made is wrong; there will always be a reference point. Blogs have become the key source of information in every niche. They are run by experts who have many years in the forex currency trading. Whether you are entirely green and want to sign up for an account or your operations do not seem to bear results, a good blogger will help you to see forex online trading in a different light. Operate for some time under a pro forex trader While forex trading online comes with numerous advantages because you can operate from anywhere, a large number rarely get the confidence to make the first move. While boldness is part of this important niche especially when taking positions, looking at how others operate is a good way to learn. For example, your mentor will help you to identify all the indicators and signals that guide traders to take positions. The pro trader will also demonstrate how to avoid risks and keep emotions away. Operating under a pro forex trader might, however, be challenging because of difficulties in getting the learner and trainer under the same roof. It might also be challenging to get matching timeframes when all the actions can be demonstrated. Open a small live account To succeed in forex trading online, you have to get down to it. Even if you opt to operate under an expert, it is prudent to open a small live account. This means that you operate on a very small scale to see all the factors come into play. This strategy is strongly recommended because a new trader can see how things can change and result in losses within minutes. The main advantage of a small live account is that the level of risk involved is very small. Because the money used in every transaction is very small, the new trader will not incur losses that can kick him out even before starting serious trading. Though the profit that you can realize is relatively small because of limited capital involvement, one still enjoys realizing some profits. However, it is the ability to scale up and edge towards becoming a pro that makes a live account the most viable option. Meta keywords Forex trading, online currency trading, foreign exchange trading, online forex trading, online forex, forex currency trading, forex online trading, forex trading online Meta description What is the right way to learn and become successful in online currency trading? New online forex traders must work on their skills, gather courage, and understand all the factors that come to play when trading. While having some background in money related training is an added advantage, the following five strategies will be very helpful in learning online forex trading. 1) Make learning progressive 2) Join online forex trading communities 3) Operate for some time under a pro forex trader 4) Open a small live account Top Seven Most Helpful Forex Trading Tips A closer look at top forex traders cannot but leave one with envy of reaching similar status. Forex trading is more of an art than science. In the same way that an artist perfects his art, a forex trader must improve the skills of interpreting the market and making timely moves. Having the right strategy and following in the footsteps of other more successful traders will set you on the path to success in forex trading. This post outlines top ten most helpful forex trading trips that will help you operate smarter and make more profit. Select the right forex trading strategy and perfect it Many people getting into forex trading are eager to make millions within the shortest time possible. To achieve this insatiable drive, they start chasing the perfect strategies that can assist them to make millions in a couple of days. However, they rarely know that the method that top traders use to earn a lot of fame have been perfected for years. For example, in-, expert forex traders applied the Carry Trade Fore Strategy to trade in currency differences between USD and AU dollars. Most of those who minted millions had taken a lot of time in forex trading to identify the expanding and shrinking currencies to trade in the difference to make money in two ways; one, earning interest, and two, currency appreciation. To realize similar success, you cannot simply start implementing the same strategy! The focus should be honing the right skills. Serious traders must look at the market with a long-term focus and ensure they can wither even the roughest times. It is very important to pick appropriate strategies such as price action. This method involves honing the skills of reading the raw price on charts and working on high probability patterns. This method is very effective, and even newbies can learn and perfect within a short time. After selecting the right strategy, you must do away with the idea of making millions overnight. Well, if there were a strategy for making millions within a day or two, every forex trader would be a millionaire. Now, it is time to perfect your method and avoid shifting from strategy to another because it will only lead to confusion. Put it this way; once you sign up for an account, identify the right forest strategy, commit fully to it, and practice to perfection. Learn to trade on higher time frames There is a general misconception especially among new forex traders that they will make more by trading on lower-time- frame charts. Though it is indeed true that shorter-time-frame charts present more signals, most of them are false and making cash is really difficult. You can turn your forex trading fortunes by turning around this point alone. The higher-time-frame charts should be your target especially if you are a newbie or want to perfect forex trading skills. Compare the short one-hour chart with a longer full day trading chart. In most of the cases, the price rarely breaks out within a span of one hour. If you see an inside bar in the one-hour chart, the price might only have covered one or several currencies within the same time zone and failed to break. However, it will be very hard to see the inside bar when trading for 24 hours because the price will have worked through various currencies in all timeframes. Only trade with cash that you can afford to lose In forex trading, using the scared money only results in numerous losses. Anybody working with scared money is at a higher risk of losing it because of fear that result to numerous mistakes. The rule of the thumb is that only the money that you can afford to lose should be traded in forex. What does this mean? It is better to look at it from a gambling point of view. Before you commit any cash for forex trading, budget appropriately and ensure that food, rent, kid’s school fees, insurance and other expenses are catered for. Even when there is more cash in your forex account, there are systems to help you limit what to use within a specific timeframe. Once you have created a forex trading account, you can load it with cash progressively as you master the skills and apply them appropriately. Always utilize the Stop Loss when trading One of the most powerful forex trading weapons in any trader’s arsenal is perhaps the stop loss. Just like in poker, the stop loss allows you to predetermine the risk and avoid a lot of losses. Stop loss makes a trader to fore look and consider a scenario if the considered option fails. After establishing the beacon, the stop loss will close your position to avoid incurring additional losses. By setting a stop loss, you enjoy the advantage of anxiety free trading. You need not worry about getting your account killed when the trade goes bad, and it is impossible to halt manually. Therefore, always place a stop loss before taking a position and let it stand there until the closing of the selected timeframe. Make sure to interact and learn from others Forex trading is a highly dynamic niche. More importantly, the currency trends largely rely on individual governments’ policies and economic stability. Therefore, a good trader should keep reading books and related publication to draw correct decisions. More importantly, it is important to work closely with other traders. It is particularly helpful to join online forex trading communities that discuss every other issue about money market. For example, consider following several currency trading blogs and engaging the experts to sharpen your skills. Even if you look green, it should not be a point to make you feel embarrassed. After all, everybody started there. The focus should be learning new skills and perfecting them to trade like a pro in the currency market. Stop watching the forex trading charts the entire day After committing to trading in a large time-frame like the daily charts, you have to steer away from the commonest mistake; watching the chart all day. This trend is very dangerous because it raises the risk of making the following mistakes; (i) Taking currency trades off when you should not (ii) Entering trade when you should not (iii) Drawing profit when you should not be doing so (iv) Tightening your stops when you should not be doing so After committing to daily timeframe, you only need to look at the chart once. That is enough. After the market closes, make sure to switch the chart on and review the viable trade set-ups. If you think there is trade, make sure to pick the right entry, stop, and target. However, if there is no trade, simply walk away and do something else for the time being. Always keep the emotions under control Let us all agree; trading at the currency market is dynamic and exciting. Because of the fun that comes with it, many people make the mistake of getting carried away. The trading capital is used to make core decisions resulting to profit for some traders and loss for others. You must avoid getting emotional at any moment because that is the point that losses commence. Getting emotional means the moment you defy the indicators because it appears you are just about to win. For example, an emotional trader will go ahead and open a position even when his strategy indicates he should wait. Others get so mad after losing ten trades in a row and immediately start trading twice the normal risks and taking positions in money pairs they are not used to. It is such moments that you lose everything gained for several years in just 30 minutes. Meta Keywords Forex trading, forex trading tips, best forex trading tips, appropriate forex strategies, forex trading account, stop loss, online forex trading communities, currency trading market, positions in money pairs Meta description Perfecting your skills in forex trading is the defining factor of your success or failure. Just like top forex trading pro keep learning, you must also master the basics of forex trading after opening an account. These tips will help you to understand the market, perfect your strategy and keep moving from one level to another. 1) Select the right forex trading strategy and perfect it 2) Learn to trade on higher time frames 3) Only trade using cash that you can afford to lose 4) Make sure to interact and learn from others 5) Always utilize the Stop Loss when trading 6) Stop watching the forex trading charts the entire day 7) Always keep the emotions under control What Is Forex Trading? 6 Things Starters Should Know About Forex Trading Forex trading is one of the most lucrative careers that a lot of people look forward to entering and make a mark. The trading takes place in the currency market where operators trade in all aspects including selling, buying, borrowing, and exchanging at either current or predetermined rate. Because you deal with currencies from various countries, the stakeholders involved include central banks, banks, investors, retail forex brokers, and hedge funds. After you sign up for an account, the single most important thing in this unique trade is the exchange between two currencies (currency pair). To succeed in forex trading, you need to identify the right strategy and understand everything about this unique niche. In this post, we discuss the main things that you should know when entering the forex market. Know that forex will not make you a millionaire overnight After understanding what forex is, it is time to get down to business and learn more about the system. There has always been a general misconception among new traders that they will make millions within a few days or even weeks. In fact, if the decision for entering forex is making such money within hours, days, weeks, or even months, it is better to reconsider the entering forex. You have to be prepared to learn about the forex indicators and follow the signals correctly to make the right moves. Besides, you must be willing to understand the myriads of factors that affect currencies and adopt the right strategy. Do not set yourself on the road to frustration, by holding onto unrealistic expectations. You will need to work hard, cultivate patience, and strict self-discipline. Forex trading is more about the journey and less about the destination For your career to be profitable and highly successful, you must make it about the process. By working on the journey, it will be easy to understand all the factors affecting the trade and make the right decisions on time. This is what will harden you to wither even the toughest times in the trade. Forex is more than simply making money; the journey is full of life lessons that will work for you even in other areas of life. No matter what level you are in, forex trading is all about learning Immediately you sign up for a for a forex trading account, you must set out on a path of progressive learning. It will hit you as a great surprise to note that even top traders are still learning new things. This is because many unfolding situations present challenges that some people have not even seen in decades. It is very important to stay updated and test your personal knowledge to be able to handle every situation and make the right decisions. Money is required to make money Well, when you are getting into forex trading, rarely will the experts tell you about losing. However, forex trading is about losing as it is about winning. For those who are not fully prepared, forex trading could become an uphill task. You will watch the financial market gulp your cash and get emotionally distressed. Therefore, you have to be prepared to win and lose at times. The best thing to do is adopting appropriate risk cutting measures such as Stop Loss that limits the loss you can incur to a specific percentage. Do not make trading any harder To trade in the forex market is very complex. Think of all the factors that affect the dollar, euro, yen, or other currency of interest. It is very difficult to follow every policy in all countries of interest. But what is forex and how do traders operate in the market? The secret is using various tools and following different indicators to pick the right signals. Consider using forex for dummies to know how to practice with various aspects of forex trading. You will work well alone after mastering all the skills While following the experts, taking their advice, reading books, and being part of the forex community are very crucial for a successful trader, the best decisions are made when alone. After learning to follow the signals in the forex market and applying all the requisite tools, success will be realized when alone. As far as you apply the right skills and do not get emotionally involved, go right ahead without worrying to lose. Meta Keywords Forex trading, currency pair, forex trading strategy, entering forex trade, forex indicators, realistic forex trading expectations, forex for dummies Meta Description Every starter entering the forex market holds a lot of expectations. While many are those targeting to make a lot of money, a newbie must be prepared to work on the journey and perfecting the skills as opposed to focusing on a specific target. To be more successful, this post outlines six most important things for starters to know and grow progressively. 1) Forex will never make you a millionaire overnight 2) Forex trading is about the process/journey and less about the destination 3) No matter what level you are in, forex trading is all about learning 4) Money is required to make more money 5) Do not make trading any harder 6) You will work well alone after mastering all the skills