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15 ways to avoid losing money

Discussion in 'Beginners Forum' started by davidjss, Apr 22, 2012.

  1. davidjss

    davidjss

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    1. Wrong Broker : A lot of forex brokers are horrible; get a good one. Read forums and chats in several different places to get an unbiased opinion.

    2. Trading During Off Hours Bank FX traders, option traders, and hedge funds have a huge advantage during off hours; they can push the currencies around when no volume is going through and the end game is new traders get fleeced trying to trade signals. There is only one signal during off hours it is better to stay out.

    3. Trading Against Prevailing Trend There is a huge difference between buying cheaply on the way down and buying cheaply. What was a low price quickly becomes a high price when you 're trading against the trend.

    4. Picking Tops and Bottoms - Looking for bargains works well at the supermarket but not trading foreign exchange; try to trade in the direction the price is going and your results will improve.

    5. Not Trading Around News Time : Most of the big moves occur around news time. The volume is high and the moves are real; there is no better time to trade fundamentally or technically than when news is released; this is when the real money adjusts their positions and as a result the prices changes reflect serious currency flow (compared to quiet times when bank traders rule the market with their customer order flow).

    6. Ignore Technical Conditions : Determining whether the market is over-extended long or over-extended short is a key determinant of near-time price action. Spike moves often occur when the market is all one way.

    7. Lack of Confidence Confidence only comes from successful trading. If you lose money early in your trading career it's very difficult to gain true confidence; the trick is don't go off half-cocked; learn the business before you trade.



    8. Being Too Smart : The most successful traders I know are high school graduates. They keep it simple and dont look beyond the obvious; their results are excellent.

    9. Stop Losses : Putting tight stop losses with retail brokers is a recipe for disaster. When you put on a trade, commit to a reasonable stop loss limit that allows your trade a fair chance to develop.

    10. Relying on Others : Real traders play a lone hand; they make their own decisions and dont rely on others to make their trading decisions for them; there is no halfway; either trade for yourself or have someone else trade for you.

    11. Too Many Charity Trades : When you make money on a well thought-out trade, dont give back half on a whim; invest your profits from good trades on the next good trade

    12. Too Much Detail : If you are trading more than 2 indicators, then you need to clean house. Having many indicators stifles trading and finds reasons not to trade. A setup and a trigger is all you need.

    13.Overconfidence : Trading is not easy; statistics show a 95% failure rate. If your doing well dont take your success for granted; always be on the lookout for ways to improve what you 're doing.

    14. Knowledge Deficiency: Most new forex traders do not take the time to learn what drives currency rates (primarily fundamentals). When some news or a statement is due out, they close out their positions and sit out the best trading opportunities; they are taught to only trade after the market calms down. So essentially they miss the whole move and then trade the random noise that follows a fundamental price move. Just think for a moment about technically trading the aftermath of a price move; there is no potential.


    15. Rumors : Rumors are rumors almost 100% of the time; think about where in the motion you heard the rumor. If EUR/USD is up 50 points in last 15 minutes and the rumor is dollar negative, well then you missed it. Whenever you trade, determine where in the motion you are entering.
     
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  3. Sixteen

    Sixteen

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    Nice a good writeup but am going to choose. Overconfidence. Yeah when we see that we are making profit, over happiness and overconfidence might make us loose much in our trade and agin relying on others is not really advisable as you may tend to lose more than gaining.
     
  4. wasi90lk

    wasi90lk

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    wrong broker should be avoided at any cost. if you deposit money in a dodgy forex broker and you do not get paid, you can lose a lot of time and money. you have to search in forums and find brokers that have good reputations.
     
  5. riddick09

    riddick09

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    I guess this thread or topic is a mimic of the threads in other forums. Anyways, those were simply important for every trader and probably they have experienced those that there were factors that affect their traders. There is nothing to do in here or to choose one but to consider all of it as the reasons of losing our trades.

    Thus, we should know all of those 15 as it will provide us ideas and hints how to prevent losses or heavy losses in the future or in our start of trading.
     
  6. valexer

    valexer

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    Yes you are right mate. I have seen some similar posts in other forums but anyway, I think this post will always be true. I think that the things mentioned in this post are very essential for new traders to avoid themselves to loose much money. I think the most important in here is the knowledge that you have prior to getting involve in live trading. With proper knowledge, this will enable you to react at certain situations and decide based on your knowledge. If you have a good knowledge about forex, you know very well what you should do at certain situations so I think you have increase your chances of winning than losing.
     
  7. Sixteen

    Sixteen

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    Its really a nice writeup indeed. And to add up, we should know when to buy and sell curriencies as for instance if we are trading the usd/eur, the europeans have times when the trade. We should take notes of that time because they are times they go to watch football and tv reality shows. And i think we need to study all this inorder to earn good.
     
  8. budado

    budado

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    That's true. that's why I joined like 15 broker site already and all I use demo account first just to familiarize myself with their rules after few weeks of trading if I think its not suitable for me to use it I don't invest. Also its important that before you invest you must know how to withdraw because theirs many broker site that offers easy deposits but when its time to withdraw you have hard time doing it.
     
  9. kasual

    kasual

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    many factor that able to make us losing money and to aviod it a trader should practice a lot to collect experience to also to know what the problem during the trading. we will dont know the mistake and solve it by reading article or book only. we should practice.
     
  10. riddick09

    riddick09

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    The fact is that we can't always avoid or prevent losing funds or money. Its the way of forex trading and therefore its expected that traders will have losses and will have profits in their trades. It will help it we have some knowledge, skills, patience and experience in trading.
     
  11. Syrine22

    Syrine22

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    Sincerely i think i like the ways that was mentioned above because it would really be helping but an additional thing is that we shouldn't be too anxious when we are trading because we might end up losing if we take such steps.
     
  12. valexer

    valexer

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    Yes you are right. We should minimize anxiety while trading because this makes us preoccupied so we could not concentrate on trading. It is always good to have a calm mind when trading so that you can make the best decisions on tough situations.
     
  13. pinoycity

    pinoycity

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    Control anxiety is always a good advice to give to beginner traders. But in real trading, a beginner trader can't help but feel anxious. You do not really know if your analysis is on the spot or not. You will feel more anxious whenever you see that the trend is not agreeing with you.
     
  14. brokenblade

    brokenblade

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    I definitely agree with this post. I especially agree with the part of getting the wrong broker. I definitely like what you have to say about keeping things simple. Complicating things beyond necessity can make you fail at anything.
     
  15. budado

    budado

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    I will just going to give one solution and that is not to practice. theirs so many reason why we loss money in forex trading. and theirs many hundred or even infinite reasons if we want to define why we loss in forex trading. But theirs only one solution for all of that. Practice. If you know what you are doing and you practice it in demo account you will going to develop sense of timing. In which you will know when to open a buy or sell position. when to take loses and when to hold.
     
  16. indieover

    indieover

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    You need to learn proper money management would that you would be able losing money only that newbies would tend to ignore what they have learned and choose to trade the way they choose. That's why usually in the beginning they would lose a lot of money.
     
  17. monyitomon

    monyitomon

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    Those are true especially we don't need over confidence in trading in Forex because it's a vast market we don't know the movement of the fairs. But with these great tips it can actually help us when we are trading. Yes, the beginning is always the hardest part.
     
  18. indieover

    indieover

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    i think beside that proper money management is just to choose the lowest leverage. i think that we shoudl stick with the lowest leverage for quite some time before you choose higher leverage so you can trade safely.
     
  19. budado

    budado

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    Trading low leverage really can help you earn more in forex trading. I have experience many trade that make me earn good amount after I'm trading with good number of position but since I'm using low leverage I can survive even the market is so volatile. In fact I'm holding my position like four weeks now and still not getting MC. That's the power of low leverage.
     
  20. kalpeshmkm

    kalpeshmkm

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    I like your suggestions for ignoring a losses and it is all rely helpful topics i like some points rely more than others like put stop loss when you make trade and trade your own way on your own analyses don't go against the trend.
     
  21. monyitomon

    monyitomon

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    You can't say don't go against the trend because it's not our control anymore but you must analyze the market first before trading so you will have an idea about the movement of the market, but we can't 100% predict the movement of the market.