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					Avoid These Common Mistakes When Trading With Forex




You can become a successful forex trader if you stay away from a few common mistakes. Read this article and
watch out for these common mistakes most traders make when they start their career.




Your emotions are not a good indicator of what you should do. Instead, use data and serious analyses of the
market. A lot of traders find themselves stressed or angry when they lose money, or they get greedy when an
investment turns out to be profitable. If you find that your emotions are getting the best of you, take
a
break from trading. Perhaps you should start with small investments so that the stress of losing money is more
manageable. Planning your strategy ahead of time and sticking to your plan is the best way to avoid emotional
decisions. With time, you will learn how to control your emotions and always make rational decisions.




Forex is a good way to make money, but remember that your profit is not guaranteed. This is why you need to
trade only with the money you can afford to lose. Take the time to budget your paycheck between different
necessities, and use the money you have leftover to trade online. You will find that trading is much less
stressful if you are not risking money you need to pay the bills. When you make a profit, use the money to
catch up on your bills if you need to, or re-invest it on forex.




It is best to focus on one currency pair at first. Choosing a currency pair means you will have to stay
up towith trends and with what is going on in these two countries. If you trade with two different currency
date
pairs, you are doubling your work. Even the best traders do not use more than three currency pairs. Choose a
popular currency pair and limit yourself to this market, even if you hear there are great opportunities
with
another pair. You can expand your trading to other pairs once you have developed better trading skills and can
manage the extra work.




Trading on very short time frames is an activity known as day trading. Only the most skilled traders are
really successful with this strategy. An inexperienced trader would more than likely make a few pennies with
each investment or decide to invest a larger sum of money and make a mistake. Short term investments do not
necessarily reflect the trend, since you might be witnessing minor fluctuation in the value of a currency.
There are mathematical formulas used to predict these fluctuations, but you should probably stay away from
these strategies until you are an expert. Instead, plan on keeping your investments throughout at least a day
or two. This is a good way to familiarize yourself with the kind of fluctuations that can be explained
and
documented.




Do your best to avoid committing these mistakes and to develop solid trading strategies. Apply yourself, and
you should quickly become a successful trader.

				
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posted:4/25/2012
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