A lot of people ask what are the pitfalls of trading?
To avoid them, consider this list:
1. Know the basics of forex thoroughly!
2. When learning a system, firstly trade on a demo account to prove that you can follow the system, and that you know the rules well. You’d also be showing that the system is behaving as expected.
3. If you have any questions about the system rules, clear them up with the author of the system, or via the support forum.
4. Most systems are pretty mechanical, but if there are any discretionary bits, these may need some extra practice.
5. Make sure you apply good money management rules.
6. Choose a system that fits in well with your daily routine.
7. Trade appropriately: don’t overtrade. If there are no trades for that day, then you’ll just have to wait til the next day.
8. Avoid revenge trading, by trading larger trade sizes and hence increasing risk, if your last trade or trades were losses.
9. Monitor your progress to see how your system is performing over time, both in returns and drawdowns, and any mistakes that you made in trading.
10. If you’re choosing to trade with forex signals, automated forex, or managed forex instead, make sure you do your due diligence to make sure the company is sound and ethical, can give you samples of their results, including details of the float, risk management and exact trades which achieved those results.
Learn how to avoid the pitfalls when learning how to read forex charts
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