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  1. #1
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    3 habits that prevent traders from making profit

    Hi traders!

    Successful trading is often not about unique trading system, it’s about doing certain things over and over again, or I would rather say – not doing them. Many beginner traders often do the same mistakes over and over again and if you would simply avoid what they do (or even do the opposite), you would get an edge on the market.

    I created my own TOP-3 list, you can add some more in commentaries to this post. I haven't uncluded money managent here, just chart patterns (market behavior) that traders fail to read properly.

    Selling «expensive» and buying «cheap»

    Most popular version of this principle is «buying bottoms» and «selling tops». When price suddenly breaks out from some range (say, to the upside) and starts to move rapidly, most traders will sell against this rally. That’s an instinct. If we’ve seen before small volatility and absence of significant price action to whatever side, we tend to deny breakout, we treat to new prices as «unfair» and rush to open a trade. Why in this case most traders are in hurry? They thing that current price action won’t long last and price will quickly drop back to the previous trading range.

    Look at yesterday’s example of NZDUSD:

    Attachment 10474

    It has rallied heavily, and believe me – there were many traders caught in short positions. Price has finally moved back to day opening, but I’m not sure that any short-sellers could benefit from that movement. You can’t enter short position (or long position, any position) if you don’t know your risk, if you are unable to calculate or estimate it. You can, of course, but it won’t be low risk trade, your risk will not be defined (don’t tell me that you know your risk because you have your stop-loss)

    So, in most cases shorting against such rally can be only reasonable when market is overbought and ready to liquidate to the downside. Such situations are pretty rare and this topic goes beyond our post.
    To avoid catching tops and bottoms, I recommend to switch between timeframes from time to time.
    What is cheap for one timeframe trader, may be expensive for other timeframe trader.


    Catching the «whipsaw»

    The second habit of beginner traders is to be aggressive after big price swings. Let’s say, we had news announcement and market reacted emotionally, We can see whipsaw with significant volatility.
    Most traders, who are bored with previous low volatility, think that market is going to move now more rapidly, more aggressively.
    But truth is that often market consolidates for 2-3 days after that, nothing happens, volatility goes down again. It’s very easy to be caught in such price action.

    Attachment 10476


    «Trading near support» (resistance)

    Third habit is too much reliance on horizontal lines that are considered to be support or resistance. In fact, support and resistance are often areas, not lines. I mean, real support and resistance areas, not local levels where day traders put their positions.
    When support/resistance «line» is already visible for everyone, it no longer provides good opportunity. Many traders can see those lines, they can calculate risk and they will enter either to the short or to the long side (trading breakouts or reversals) placing their stops beyond this line. So, a lot of orders will be concentrated near those lines, and market will not have reason to leave this level – the more liquidity it has near certain level, the less reasons it has to go away from it. The most expectable scenario is «whipsaw» near such «levels».

    Attachment 10475

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  2. #2471
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    I do agree with you totally , and I want to add another important thing to this is the trading with a very clear and strict money mangement which can be very important to find the best ways for the market and its way .to make good profits , using some indicators which can be very effective such trend lines and support and resistance levels can show us the best points to enter and to reflect very strong

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    Registered user Sixteen's Avatar
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    Many traders lack the mind to learn and this is where they experience failure in forex. Building success would require so much and if you are not ready it will very hard or very difficult. We must keep up with learning and work on the side to maintain the right trade if we want to succeed. Making profits is a good course and putting large amount of time to practice and build a system is what will give us the potential to earn. Profit making is important and if we don't learn from our mistakes it will prevent us to achieve profits.

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    Registered user Silhouette's Avatar
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    Quote Originally Posted by Sixteen View Post
    Many traders lack the mind to learn and this is where they experience failure in forex. Building success would require so much and if you are not ready it will very hard or very difficult. We must keep up with learning and work on the side to maintain the right trade if we want to succeed. Making profits is a good course and putting large amount of time to practice and build a system is what will give us the potential to earn. Profit making is important and if we don't learn from our mistakes it will prevent us to achieve profits.
    Maybe it's not their fault at all when they haven't experience something with their trading. It's only matter of time for us to face specific, various situations in market that will change our mindset entirely and then we'll learn harder to make big improvements with our system. Bad habits won't be recognized as bad if they don't give bad result. Soon the answers we need will be revealed to ourself with our trading performance.

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    rules made to be followed, not to be broken

  5. #2474
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    Quote Originally Posted by Silhouette View Post
    Maybe it's not their fault at all when they haven't experience something with their trading. It's only matter of time for us to face specific, various situations in market that will change our mindset entirely and then we'll learn harder to make big improvements with our system. Bad habits won't be recognized as bad if they don't give bad result. Soon the answers we need will be revealed to ourself with our trading performance.
    we accept our performance is depend on our experience so its good we can increase experience with hard work, we can increase experience with practice, and many other things, so learning is the essential thing and if we are successful in learning our earning will be sure and easy for us, so learn on demo and give it time also

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  6. #2475
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    Actually this market can learn us a lot of wrong habits which must be avoided .when having a very high volatile market produces very strong trades every moment i think that there can be a very strong well of the trader to catch all of them at the same time , thus there must be very strong control over the making for the effective ways to be away of the market when there are some dangers

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    Quote Originally Posted by altafch View Post
    we accept our performance is depend on our experience so its good we can increase experience with hard work, we can increase experience with practice, and many other things, so learning is the essential thing and if we are successful in learning our earning will be sure and easy for us, so learn on demo and give it time also
    Our performance and results are there for us to regulate and hence we should work to improve on ou Forex understanding and mindset too. Discipline has to be learned as soon as possible because until we learned discipline we will be losing in Forex no matter what. In beginning most of us dont mind quality much, we just want to make it fast through more risk or more number of short term trades.

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    Registered user ola4real's Avatar
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    Quote Originally Posted by naeem555 View Post
    no one want to do this but in support and resistance when we do this and market behave opposite so this situation automatically comes, for this thing we can avoid just if we wait for some time we can clear market direction then otherwise we can not and can place wrong order, so make sure before entering you wait for some time and check market is making reversal or breakout then you enter
    It is always happening, forex traders can not be doing without the false breakout, because it is false breakout I suspected from what you have explained above. Forex field is all about up and down movement, this movement is not always smooth too, so forex traders should always be ready for false breakout within the levels of support and resistance, that is what makes traders to know if a trend is rejected or not.

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    Quote Originally Posted by ola4real View Post
    It is always happening, forex traders can not be doing without the false breakout, because it is false breakout I suspected from what you have explained above. Forex field is all about up and down movement, this movement is not always smooth too, so forex traders should always be ready for false breakout within the levels of support and resistance, that is what makes traders to know if a trend is rejected or not.
    if you are worry about false breakout i think wait is our best option we can wait and can place order after some good wait, this thing will make you able to understand reality, it will tell you that breakout was real or not, if real you can use order if not still you can place order to take risk or can wait also, i believe our risks big part can be avoided by our wait and management here if we do it properly

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    Registered user cutiekc's Avatar
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    The most common of them all is when the trader is not being disciplined, when a trader lacks that discipline, it will get to be a problem for them, in as much as we want to become successful, we ought to attain discipline, because that will be what which will help us handle our trading account in the best possible ways, no one gets to become profitable also if they don't accept the possibility of losing.

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  11. #2480
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    Quote Originally Posted by cutiekc View Post
    The most common of them all is when the trader is not being disciplined, when a trader lacks that discipline, it will get to be a problem for them, in as much as we want to become successful, we ought to attain discipline, because that will be what which will help us handle our trading account in the best possible ways, no one gets to become profitable also if they don't accept the possibility of losing.
    Discipline is a strong virtue that will allow us to trade Forex with due regards to our plans and risk management rules. When we find that any bad habit is corrupting our ways of trading then we should learn and overcome those habits. Trading Forex without learning is an invitation to misery and so being keen for earning, we should be keen for learning too above that.

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