45 ways to avoid financial losses
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    Super Moderator Gulfstream's Avatar
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    45 ways to avoid financial losses

    45 ways to avoid financial losses in FOREX

    1. Lack of knowledge. Most beginners do not want to spend their time on understanding what drives the market (fundamentals).

    2. Excessive trading. Frequent opening positions with tight stops and small profits only brings money to your broker. The desire to "just" make a hundred bucks a day with a small profit where possible is a very losing strategy.

    3. Use of borrowings. Loan is a road to the two ends. The broker wants you to use as much money as possible because the size of the position determines the number of spread. The greater the size of the position, the greater the spread the broker earns.

    4. Someone else's opinion. Professionals sell by themselves, they make their own decisions and never let others make decisions for them. There is no middle ground - either you're trading by yourself or someone trades for you.

    5. Stop loss. The arrangement of hard stops is a direct road to disaster. The free stop loss provides a better chance to end the transaction with a profit.


    6. Demo account. Demo accounts provided by brokers are the "stool pigeon" in order to entice customers. They are not so "sensitive" as the real account and a demo account includes a lot of options that do not exist on a live account. For example, the intersection of the short moving average may work well on a demo account, but on real one - no.

    7. Trading in the quiet hours. Bank brokers, traders, trading options, hedge funds have a big advantage in the quiet hours, when the market is not active. They can move the market when the volatility is not too high, forcing newcomers to open positions on the signals. During quiet hours there is only one signal: stay away.

    8. Trading currency, not a pair. Currency trading in the transaction is only half of deal. The success or failure of the deal depends on other currencies, which together constitute a pair.

    9. Trading without a plan. "Making money" - is not the plan. Trading Plan is a program for success. It must include the maximum loss in the transaction, otherwise it is not a plan and you will be another addition to the statistics (95% of beginners lose money and go away from forex forever).

    10. Trading against the trend. There is a big difference between buying at the bottom and buying lower at the bearish trend. What used to be the lowest price, can quickly become a high price in a downtrend.

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    Super Moderator Gulfstream's Avatar
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    11. Closing. If you opened an order and it is moving not as you planned, try to get out of it at a best price as possible, do not increase the loss. If your position is in profit, do not close it ahead of time because you are bored or to relieve stress. Stress is the part of trading and you need to get used to it.

    12. Short-term trading. If your goal is 20 points, do not open the transaction, for the spread plays against you in such small profits.

    13. Search for peaks and troughs. Cheap things are in the supermarket, not in Forex. It is better to trade with the trend, it will greatly improve your results.

    14. Consider oneself too smart. Most successful traders whom I know graduated from college. They always see the obvious and do not complicate. They get great results.

    15. Do not trade during news. Most of the movements are in the news. Volume increases and large movements occur. This is the best time to trade, regardless of what kind of the analysis you use (technical or fundamental). This is the exact time, when the big players open their positions, this is why the volume is increasing (in contrast to the quiet hours when the banks can move the market.)

    16. Ignoring technical factors. Definition of bullish or bearish trend - the key to understanding price movement. "Spikes" often occur on flat market.

    17. Trading on emotions. If you haven’t planned your transaction, you open a position, based on emotions. Emotions are very bad for transactions.

    18. Lack of confidence. Confidence comes only during a successful trade. If at the beginning of career you lose money in future it will be very difficult to restore confidence. The secret is to not trade until you learn. First learn, then trade.

    19. Lack of courage to take losses. There is nothing brave to increase the stop loss, it is just silly. It is much more difficult to take a loss and wait for a new deal. Many traders went "broken" by the bad feelings about the deal. We must remember - the market often behaves unpredictably, so do not worry much about a bad deal. You should not overestimate a good deal either. One good transaction does not make you a good trader. A good trader is determined by the monthly and annual income.

    20. Lack of concentration. For a successful trade fantasies do not fit. You should not count in the mind gains or losses that have not occurred. Focus on a specific transaction, determine the stop loss and watch the particular transaction. Feel like an astronaut: relax and enjoy the flight. It makes no sense to worry, because you can not control the market. The market will do what he wants.

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    Super Moderator Gulfstream's Avatar
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    21. Incorrect interpretation of the news. Media convey its interpretation of the facts and generally value a single fact, missing the main point. Learn how to understand the primary sources.

    22. Luck. Changing the balance in the account can not show what kind of trader you are. In fact, if you earn a lot of money, but the risk is too big, sooner or later you will go broke. It is necessary to analyze the details of the transaction. Pay particular attention to losses. Ask yourself: "If I had received a series of large losses, how would my account look like". Usually traders make money without big losses during the day, which allows them to have a positive balance.

    23. Too many charity deals. When you've earned money for a well-planned transaction, do not invest them in a bad one. Better to invest them in another well-thought-out one.

    24. Courage in any situation. When the policeman breaks down the drug dealer’s door, he is scared. When firefighter climbs to the roof of a burning house, he is scared too, but he still does it because that's his job. Same thing is in Forex trading. Fear - it is a natural feeling, but you need to open the transaction. No transactions - no money.

    25. The quality of time spent at the monitor. I suggest to trade 3 hours, but it will be 3 ours of concentration. In fact it is how long our brain exactly allows us. When you trade you need to have 100% concentration. Partial attention simply does not work. The time you spend just watching the price do not count. Spend less time at the monitor, but when you trade, be fully concentrated.

    26. Rationalism. Open the deal and let it go its own way. If your well-thought-out stop loss has been achieved by the price, then so be it. You should not move the stop loss, it is the same as getting up after a heavy blow knocked you off your feet. It's pointless, it is going to be worse. No need to ignore the obvious, if you are wrong, close the position. Try next time. Small loss will not do you harm, big one will "kill" you.

    27. Mix apples with oranges. Has it ever happened to you? You see that the EUR / USD goes up and you buy GBP / USD because it has not risen yet - it's a mistake. In most cases this can be explained by the fact that the pound is outbidden or has already increased by the news. If the euro is rising - buy euros.

    28. Prevarication of difficult transactions. Bank forex traders say: "the harder the deal, the better it is." It comes with experience.

    29. Too many details. If you use more than 2 indicators, then you should rethink your strategy. In an abundance of information there is always a reason not to open a transaction. All you need is to setup an indicator to make a deal.

    30. Quickly give up. The first day transaction can be bad, but it does not mean that we should not continue to trade. You just need to determine how much you are willing to lose in a day. It is impossible to make money regretting about every loss. Bad deals happen and you should be ready for this.

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    Super Moderator Gulfstream's Avatar
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    31. Jump out of the deal in the bargain. Do not be penny-wise and pound-foolish. Wait for a signal, open the deal setting a good stop, so that the market noise would not touch it.

    32. Fear of stop loss. In trade, there is nothing superfluous, it's just business. You should not consider themselves poor, if you had a bad deal. Maybe you're a little rushed or "big players" entered the game, thus leading to an unexpected jump in prices. Once again, place the stop beforehand and never move it. If the price has gone wrong, then most likely it will continue to move. Newton said: "The object in motion tends to stay in motion ...".

    33. Rely on the formula of "Risk: Profit = 1:1." This formula does not benefit, but if your stop loss - 20 points, and profit - 60 points, then your formula "Risk:Profit" will be 3:1.

    34. Use of false reasons. The fact that the euro is going up, does not say we need to buy. Buying euros during the flat is even worse. You pay a spread, not even knowing where the currency is going. If you're bored - do not trade, you are bored just because there are no transactions.

    35. Rumors. Rumors are just rumors. Think, when you heard the rumors. If the euro has been going up for 15 minutes and you know that the rumors are not in favor of the dollar - you are too late. Stay in motion.

    36. Trading on the crossing short averages. This is the biggest swindle in Forex. When the shorter moving average crosses a longer one, it only means that the price in the short term equal to the price in the longer term. I could never understand why this signal is "bull" or "bear." This signal can be easily obtained, what actually big companies are using producing programs for Forex, but profitwise - this is an absolute zero.

    37. Stochastic - another thing for pumping out money. Personally, I think that this indicator works, but only in reverse. Overbought is a strong side, oversold is weak. Buy when the price is in the overbought zone and sell in oversold zone. You catch the trend and have time to take off a lot of points.

    38. Bad broker. Most brokers are simply awful. Check out the forums to choose a broker.

    39. False results. Be careful of buying a "black box." There are systems that do not disclose how a signal appears. Most of them are just garbage. They show the history of huge profits, but think about it: if you had to use a dozen filters and you've got a look into the past, wouldn’t you make a good strategy? But this strategy can not work in the present. On the history you can create a lot of strategies, but be careful to use them in real life.

    40. Incompatibility. In every business (including Forex) there must be a plan. As long as you do not take the time and do not write the rules that you follow, your trade will be random. Write a plan, write the rules and follow them. Set realistic goal and you will achieve it.

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    Super Moderator Gulfstream's Avatar
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    41. Two hares. Concentrate on a single pair. Each currency has its own style, and until you learn it, you will not understand how it’s traded. No need to be sprayed, first focus on one pair, until you fully study it.

    42. Long-term planning. Do not do it. Stay in the present, especially if you are a day trader. No matter what happens next month or next week. If your stop loss is at 30-50 points, direct your thoughts to the present. But, I'm not saying that the long-term trend is not important. I just want to say that the long-term trend does not always help you if you sell short term.

    43. Excessive self-confidence. Trading is simple, but not easy. Statistics say that 95% of the newcomers are defeated in Forex. If you work, then you should not take it for granted. Always seeking to improve what you are doing.

    44. Do not lose control. When you open a transaction, you have to act as calmly as if you did not have an open position. To do this you need to relax and enjoy.

    45. To stay in the game. I do not recommend demo trading because traders gain bad habits by playing fictional money. On the other hand, I do not agree with those who say "let it settle down first." We need to start to trade and take the risk in order not feel the same while losing or winning.

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    Dear Moderator Sir i have read the thread i am not such an experienced trader but as i have seen that setting stop loss is always better for a trader for especially the traders which have less funds in their account it is better for them to stop blowing their accounts completely if they had made a wrong decision by mistake.
    will you please comment on the number 5 of your thread about stop loss in detail.

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    Rookie mohamed reda's Avatar
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    lack of experience will be enough to have loss in Forex market because making any success or making any profits from Forex trading is depend on your experience so that you must work so hard to and learn from your mistakes as you can in order to have this experience with out any problems and this most simple way to have this experience id trading with the demo trading for enough time.

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    thanks for sharing sir, because its good, i think you are right, but we need to be patient when we trade because patience is something that we need to have before we can be a successful trader, and also working hard, as hard as you can, you need to believe that your hardwork will pay you soon, and always learning even in demo or your real trading account

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    I see it's hard to avoid the loss significantly, but can only be that we reduce the loss ratio, or to learn from the mistakes that soak in the forex market and this by reducing the proportion of risk to be up between 2 to 5% and also to withdraw profits fully or pull lineage70% of the profits, and learn from the loss that we are exposed to in the market so as not to fall out again

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    Registered user zintek's Avatar
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    Here's a 10-step strategy for knowing the difficulties that avoid weight-loss over 40, and for studying how to get over them.

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