The Authority’ on Price Action Trading. In 2016, Nial won the Million Dollar Trader Competition. Today’s lesson is going to discuss some common mistakes that how to make money everyday trading forex make, which inevitably lead to losing money, and provide solutions to those mistakes.
I know what the solutions are because I have made all of these mistakes on my own trading journey. I know what you’re going through, how it feels and how to help you dig out of the rut. One of the most common mistakes I see traders making, is simply thinking too much. People tend to make trading much harder than it is. I get emails nearly every day from traders who clearly are over-thinking the market and making things more complicated than they need to be. Reading that article will give you some good insight into how you can stop thinking so much and start trading instead.
Over-trading is sort of the opposite of over-thinking, in a way. Over-thinking usually leads to not trading much, if it all, because you think yourself right out of perfectly good trades. Whereas, over-trading means you probably aren’t thinking enough. You haven’t put the time to learn how to trade properly, build a proper trading plan, or perhaps you are just so greedy that you don’t have the patience to wait for your trading edge to appear in the market. Whatever the cause, trading too much can be a very quick route to blowing out your trading account. Dear Nial, I want to know if I should exit a USDJPY trade I am currently in, as I am also in 5 other trades of pairs I think may be correlated.
I am typically only ever in one trade at a time, because there really is no point in being in more than that. Or, perhaps if you are trading very different instruments, like say a Forex pair and a commodity future. But, typically, beginning traders being in multiple markets at once, means they are over-trading and probably over-leveraging their accounts. The best way to understand the solution to the problem of over-trading, is to read an article I wrote on the matter. Low-Frequency trading, you should check out to learn more. Risking more than you can mentally afford to lose at any one time, is a death-sentence in trading. I mean, you need to really stop and look at your finances and determine how much money can you realistically afford to lose on any given trade.
This means being honest with yourself, not ignoring things like credit card debt or student loan debt, etc. Read more about risk management here. Also, I hope to make money in the market so I can get your course soon. OK, most of you have a good idea of what is wrong with the above statements in Stan’s quote. But for those of you who don’t, let’s discuss. You must first learn how to trade from a reputable source, and then you will need to spend some time demo trading and ironing out a trading plan, before you even think about risking real money in the market.