Forex trading – 3 Pitfalls you need to avoid

Forex Pitfall 1: Inexperience

It is important to first experience with investing in Forex. Without training you never get into the first team football, and you will not get a good return without training in forex. The important thing is to have patience with this training. Take your time to invest in Forex learning. This can be free with a demo account with a broker.

Only start trading with real money if you succeeded with your demo account you multiply think 50% or 100% return virtual capital before you invest real money. This may seem excessive, but it ensures that you will know how it works and make money instead of losing.

You have experience in trading Forex and gained that for free. You know how the stock market reacts to different news and you did it to earn “virtual” money trading Forex. A stock market simulator or demo account with a broker works in the exact same way as the regular investing. You might have other words that also achieved efficiency with real money. This is the easiest trap to circumvent, it is free, it just takes some time.

Forex Pitfall 2: Too small cash margin

Unfortunately, Forex trading is not an exact science. Yet there are many investors who are looking it that way. There is a certain risk and return incalculable but sometimes slightly different from preconceived frameworks in order to be profitable. Forex trading starts to deliver really when you open positions from 1000 euros.Three pitfalls in Forex trading

However, this does not mean that you should not deal with a smaller amount. An important part of money management is to understand what happens when you put your own capital at stake. Some investors react very irrational in the fear of losing their own money.

If you start investing with amounts of 100/200/300 euro you can learn how to respond when you put your own money at stake. Do not give up too easily! Be well in Forex takes time.

Forex Pitfall 3: Too many trades open

There are two ways to trade a lot of Forex. First, there are many investors who enter big leverages. 1:400 can indeed enter into a position of 40 000 euro with only 100 euro of your own cash. But you can easily lose your entire bet in a day.

A stop loss order is not particularly much sense as the maximum loss lets you bet 100 euros. All transactions must go well in order to profit. So investing unfortunately does not work.

Next to this. having too many open positions can also lead to a significant loss. Eventually having 15 open positions, this results in no overview and an increasing loss. Keep your head cool. Trade not too much, not too big trading positions.