Ten Reasons New Traders Lose money: Reason #4

Forex TraderReason Number 4: No Discipline…

In any new venture you make it is imperative that you have a plan and you stick to it. Trading is no different. Developing a plan and following it is fundamental to success when trading. Although there are extenuating circumstances that may change your plan remember to change your plan first then change what you are doing. the shoot first ask questions later attitude can call any Forex trader.

If you feel that your strengths lie in Fundamental analysis and you have a measured amount of success trading that way it is probably best to ignore the technical move that you see developing.  Although Technical Analysis can be an effective way to trade if it is not your strong suit you are probably better off just staying away from the trade.

Many times a Forex Trader will enter a trade with stop loss and take profit levels already entered on the ticket. When the trader puts these exit points on a ticket they generally have good reason for doing so. A major pitfall for new traders is to adjust the stop loss as the trade goes against them. the continue to let the trade ride lower and lower in hopes that it will eventually come back. What generally happens in this situation is that the trade goes so far out of reach that the trader will never be able to make a profit and will eventually get a margin call in their account. whereas if they had left the original stop loss in place the trade would have ended with a small loss.

HINT: Make a plan and stick to it. Read up on trading techniques and tactics to form your own plan. make sure that you feel comfortable with this plan, particularly your entry and exit points. (over 50% of trades are doomed from the beginning because of bad entry points.)