What is n. one mistake forex traders make?

[kaiceaziz]

I can assure you guys that traders make profits all the time. But they are losing more on negative order than winning on profitable orders. For that i think the number one mistake is that they didnt use a stop loss limit to enforce a risk/reward ratio of 1:1 or higher.
According to "the DailyFX research" :team has looked through amalgamated trading data on thousands of FXCM live accounts. In this article, we look at the biggest mistake that forex traders make, and a way to trade appropriately.
David Rodriguez, Quantitative Strategist at DailyFX presented this research at the 2011 FXCM Currency Trading Expo. [Why Does the Average Forex Trader Do Wrong?]

He found that most traders are correct more than 50% all the time. He did a search results of a data set of over 12 million real trades conducted by FXCM clients worldwide in 2009 and 2010. For example, in EUR/USD, the most popular currency pair, FXCM clients in the sample were profitable on 59% of their trades, and lost on 41% of their trades. So if traders tend to be right more than half the time then when he mistakes? He found out that; They lose more money on their losing trades than they make on their winning trades. The result shows that EUR/USD trades were profitable 59% of the time, but trader losses on EUR/USD were an average of 127 pips while profits were only an average of 65 pips. While traders were correct more than half the time, they lost nearly twice as much on their losing trades as they won on winning trades losing money overall. Finally he found out that theory : Cut Your Losses Early, Let Your Profits Run. And he also conducted that

Avoiding the loss-making problem described above is pretty simple. When trading, always follow one simple rule: always seek a bigger reward than the loss you are risking. This is a valuable piece of advice that can be found in almost every trading book. Typically, this is called a “risk/reward ratio”

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So according to the searcher , do you agree that this is number one mistake in forex? And if not what is dangerous more to you?

 

[barood4money]

I never use stop loss while trading. But i never get loss. Because I believe my analysis. So the main factor of earning profit or facing loss is your analysis. If your analyse is wrong then you will also face loss while using stop loss.

 

[Bonyi]

The mistakes traders make at times may include: lack of knowledge. Many traders don't really want to study to learn. They want to just jump into the market with sole purpose of making quick. The most mistake is not acquiring knowledge.

 

[kaiceaziz]

I never use stop loss while trading. But i never get loss. Because I believe my analysis. So the main factor of earning profit or facing loss is your analysis. If your analyse is wrong then you will also face loss while using stop loss.

Well it s hard for me to believe that any trader, even professional . Trade forex without any losses. You said you dont face losses even though you dont use stop loss. Then you must be a millionaire by now. Loss is involved in forex man, whether we do care or not. But what matters is how to make the loss a small amount compared to profit. That s the point.

 

[gkintl]

The assessment of risk reward ratio is very much important before entering into a trade. However, cutting down losses and driving on profits is possible only with a strict mind control. So, the loss of such traders is mainly due to behavioral defects that in turn force errors in strategy. Trading is more of psychological battle than strategic. A trader who has good mind control will rein over the market sooner.

 

[barood4money]

Well it s hard for me to believe that any trader, even professional . Trade forex without any losses. You said you dont face losses even though you dont use stop loss. Then you must be a millionaire by now. Loss is involved in forex man, whether we do care or not. But what matters is how to make the loss a small amount compared to profit. That s the point.

well, I am not a professional trader. I trade to add some extra amount to my savings. And i use only forum bonus and some proportion of my profit saved at trading account. I always trade when it is very easy to analyse and market is very volatile. Then i use high leverage and make a good amount of money. When i get expected profit, i don't greed for more and stop the trade.

 

[Bonyi]

I never use stop loss while trading. But i never get loss. Because I believe my analysis. So the main factor of earning profit or facing loss is your analysis. If your analyse is wrong then you will also face loss while using stop loss.

This is admirable. I like the fact that you don't use stop loss while trading and you don't get loss because you do your analysis well before trading. This is very commendable and every newbies need to learn this.

 

[kaiceaziz]

The assessment of risk reward ratio is very much important before entering into a trade. However, cutting down losses and driving on profits is possible only with a strict mind control. So, the loss of such traders is mainly due to behavioral defects that in turn force errors in strategy. Trading is more of psychological battle than strategic. A trader who has good mind control will rein over the market sooner.

Psychological means is important. But i think a man without strategical knowledge doesnt have g peace of mind at all and this will lead to poor operation bad psychology in getting nervous and then losing. Every thing comes with knowledge. There are even courses teach you how to calm down and prepare yourself psychologically for trading. Knowledge is the number one to success in forex.

 

[kaiceaziz]

Another advantage of a stop loss order is you don't have to monitor on a daily basis how a stock is performing. This is particularly handy when you are on vacation or in a place that you obrerve your orders for a long period .
The most important thing is that, stop loss makes your decision free from any emotional influences. the beauty of the stop-loss order is that it costs nothing to implement.

 

[Daisy]

Another advantage of a stop loss order is you don't have to monitor on a daily basis how a stock is performing. This is particularly handy when you are on vacation or in a place that you obrerve your orders for a long period .
The most important thing is that, stop loss makes your decision free from any emotional influences. the beauty of the stop-loss order is that it costs nothing to implement.

We all need to use stop loss in short term and long term trading. It will prevent us from total wipe out of our account. There is not a reason to not use it. The market fluctuates so much so use wide range sl but still use it. Tight sl will take you out of the trade fast. This makes us feel more secure for our trade since we will not have to wait too long for it.

 

[Pettyeve]

Traders make different mistakes in here in trading in forex but the number one mistake that is bigger than every mistake a trader will be making is when he or she does not analyze the market before trading.

 

[kasual]

Common mistake and it often occur is when traders trade without proper knowledge and strategy. they are trade based on guessing only and rely on luck to point out the outcome. Traders not necessary to rush to trade in live account when they are not knowledgeable yet. Better if they are conduct practice in demo account and point out the strategy they can use to make profit in trading.

 

[Decub]

I think the level of mistake a trader makes depends on his own level of knowledge. Newbies can be pardoned as most of their mistakes arise from fear and lack of confidence which can be understood at their own level of knowledge. The pro traders are always affected by greed and want for more.

 

[kasual]

Being greed and take aggressive approach is one of traders mistake in trading. Traders impatient with small profit and they are choose to use big margin though they know that loss will make capital to get high capital reduce. Inability to remain patient lead traders to conduct emotional decision. Which often, the result end to bad.

 

[amirastroman]

There are many of basic mistakes each trader do when they are new. I likewise did likewise. Like opening trade position before huge news occasions and after the news occasions. Opening an excessive number of parts is another missteps. Gambling over 1% of the capital is additionally an oversight. Another huge oversight is unlikely desire. We come here to influence twofold, to triple of our capital over night. In any case, it's the greatest mix-up one can have. We likewise commit error in picking broker. Presently I am satisfied with Markets Cube as it has SiRiX social trading platform where I can take after experienced trader.

 

[Faal]

I see, maximum new traders want quick success here! That’s the most common problem actually! Basically, there is nothing like a short cut way of money making in Forex! It’s a long term process!

 

[Lee Mark]

I seem, rushing is the number one trading mistake by the new Forex traders! In Forex business, there is no shortcut way of income! So, all of greedy Forex traders are the losers here!

 

[sininfinity]

I see, maximum new traders want quick success here! That’s the most common problem actually! Basically, there is nothing like a short cut way of money making in Forex! It’s a long term process!

Agree with this. They see that forex has the potential to make one successful overnight but in reality it only happens in thoughts. In real life it does not happen. People have to have realistic or it may cost them.

 

[Pill Head]

There are many mistakes that are made by the Forex Traders, but if you repeat it over and over again, you wouldn't be able to survive for long in the Forex Trading.

 

[Anderson]

Number one biggest mistake new trade do is they treat forex trading as a money machine. Open trade and make profit. They think it is the easiest job in the world. But in reality you need profound understanding of the market. My advice to new trader is gain necessary knowledge and skills.