Frequent Mistakes Made In Forex
Forex market provides many advantages for its investors. On the other hand, details which is ignored or payed less attention brings remarkable loss to investors. Let look at mistakes frequently made by investors;
- Making high volume transaction: Leverage transaction requires different risk perception compared to spot markets. Proportional difference between size of transaction and capital must be carefully considered as a factor. Using all or most of your money in a transaction on forex market may cause you losing all of your capital soon.
- Not determining profit-taking and loss-stop levels: as it should be, a strategic position taking in the market requires to set profit and loss aims in which these aims is reached the position must be stopped, reconsidered, and if necessary and profitable, then reopened maybe.
- Carrying position in loss for long time: If a level which command to exit in position as loss happened at a specific expense is not determined, then loss is carried on long time in hope that it will turn bringing profit soon, which bring investors remarkable loss even all capital.
- Taking emotional decisions: It is expected for a trader to cleanse all emotional instincts from taking rational action. Always hard part of the business is to take action isolated from emotions.
- Perfunctory transactions: Making transaction in finance market is a serious business which requires attention. Rational investors are aware of that frivolous actions in finance market do not bring money in long terms.
- Taking action without sufficient experience in the market: Without trying in demo accounts to practice for forex market in order to learn how to do this job, it may be the most expensive way of learning forex market to enter directly into the market.