Currency Trading For Beginners

By: Monica Hendrix
It's a fact that 95% of traders lose money in forex trading, here we will give 1o beliefs most of these losers hold. Currency trading for beginners can be hard as there are a lot of myths promoted online so learn them, avoid them and join the elite 5% of winners...

Here are your ten beliefs that will slash your profits.

1. You can predict forex price direction

Probably one of the biggest myths out there, prediction is another word for hoping and guessing and you don't get rewarded for this in life, let alone forex trading.

Only act on the reality of price change and don't predict.

2. Buy low sell high is a great way to make money

Not in forex trading - the best and biggest trends come from breakouts to new highs or lows. Wait to buy low and sell high and you will miss these big moves. If you want to make the big money learn to buy and sell breakouts.

3. Markets move to scientific formulas

Really related to point 1 and loved by the far out crowd who think the scientific systems of Gann, Fibonacci and Elliot will help them win but the fact is if markets did move to a scientific theory, there would be no market as we would all know the price in advance.



Common sense really, but its surprising how many people fall for this myth.

4. Complicated systems are best

The reverse is true - simple systems are best as they are more robust, with fewer elements to break in the brutal world of trading. Over complicate a system and it will have too many elements to break.

5. You can follow experts and the news and win

News and experts reflect what the majority who lose believe and furthermore, markets don't move on news stories they move on human perception of them. It is how a news story is perceived by the traders that determines the course of events.

If you could trade on news and expert stories a lot more people would win and they don't. Will Rogers once said - "I only believe what I read in the papers" He was joking of course - but its surprising, how many people see a story on NBC or CNN and think it will help them win.

6. You can day trade and win

No you cant - the time period is to short and the data is not valid! Same goes for forex scalping. You can't get the odds in your favour so you can't win - period.

7. The more effort you put in the more you get out

If you work in a shop maybe - but in forex trading, the only criteria you are judged on is how accurate your trading signal is. It can take you 5 minutes and make a bundle or 10 hours and give you a thumping loss.

The key to winning at forex is to work smart not hard.

8. You need to trail stops closely to lock in profit

Trail it too closely and you will never follow the big trends and make the big money. Most traders try to restrict risk so much, they actually create it and guarantee they will lose.

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