We all know that 95% of all Forex traders lose money and most of these traders have no hope of winning because they base their strategies on principles that guarantee losses, which we will explore further in this article.
The mistakes are promoted as investment wisdom online by many vendors and gurus, and the reason for this is they make Forex trading success appear “easy”, and the naïve and greedy trader falls for the message and losses money.
When I started trading 25 years ago, most novice traders were making these mistakes and they are still making them today and probably always will.
You need to avoid them, if you want to enjoy Forex trading success. So, let’s take a look at the strategy mistakes in more detail.
Mistake 1
One of the most common mistakes in a strategy is to try and predict Forex price turns in advance, which leads traders to think they can make money consistently with tight stops of around 30 – 50 pips but the bad news for these traders is – You Can’t! The above so-called logic is incorrect, so let’s take a look at the error in more detail and look at how to trade correctly, with better risk control and better odds of success and kjøpe kryptovaluta.
Mistake 2
Picking exact tops and bottoms is impossible but that doesn’t stop the losing Forex crowd, trying it, again and again, year after year, with the same result. They’re trying to trade to short term and seeing order in a day session most of the time ( but all volatility in a day session is random) so trying to trade 5 minute or hourly charts is not a smart way to trade and no experienced trader would do it.
Mistake 3
The shorter the trading time frame, the greater the randomness and therefore the less reliable any trading signal will tend to be. When you are looking at a trading daily and weekly chart, you will notice random ‘noise’ but still see valid resistance and long-term trends.
However, when you’re looking at a short time frame such as charts made of 5, 10, or 15 minute or hourly time frames you will generally see almost all the price changes are down to noise. We have run numerous backtests on this; you can do the same and will get the same result.
Mistake 4
There are plenty of people who tell you that Forex markets can be predicted and conform to some mystical order but they don’t; want the proof? Well think about it – if prices really could be predicted in advance, the market would cease to exist as we would all know the price before hand.
Despite this being obvious, it doesn’t stop a huge amount of traders believing in using Fibonacci retracements which are supposed to define some mystical support and resistance levels in the market.
Before we look at the evidence that they don’t work – let’s look at the background to the theory to show just how ridiculous it is, in terms of trying to apply it to Forex markets to make money.
Conclusion
You can avoid the most common mistakes by following the points above. Check out Blueberry Markets Review and find out if this broker is for you.