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Why You Are Still Not Rich. Chapter II

10:43 AM Sep 26, 2019
4428
Forex trading

It’s time to get back to the discussion of things that don’t let you receive consistent profits. In a previous article, we have talked about 5 such tips. Today we’ll take a look at 5 more.

Mistake #1. Ignoring Risk Management

If you jump into trading without thought-through risk management, you are doomed to fail. I can call two main mistakes here: too large trading volumes and risking money you can’t afford to lose. It usually happens for the following reasons:

  • Greed. You want to earn a lot immediately, which makes you put everything at stake.
  • Poor education. You come to trading unprepared and don’t realize the importance of proper risk management.

What to Do. Start Planning

The first thing you need to do is to understand that you can’t risk money you can’t afford to lose. The next thing is to accept the fact that losses are unavoidable. It might sound strange, but the easier you take your losses, the higher your chances to receive good profits.

Invest only the money which you can call “extra”. And even then don’t put on risk the whole sum at once, only a small percentage of it. This way you have more chances to stay in the market for a while.

Mistake #2. Not Reading Your Charts Properly

When you don’t know how to read the chart you can’t predict the further development of the market situation. Many traders lose money because they can’t tell the difference between the main trend and a pullback or false breakout of a level. The same thing happens when they try to make assumptions based on charts with short timeframes.

What to Do. Learning. And More Learning Again.

You have to know how to recognize key levels on charts:

  • Support and resistance levels
  • Important figures on charts

The best place for learning is a demo account. Transfer to real trading only when you easily mark required levels and determine main trends.

Mistake #3. Ignoring of Daily Chart

It might seem so tempting to open little tiny trades and make quick profits in no time. But in the long run, such a strategy will not make you a successful trader, because you can’t really assess a situation in the market without looking at a daily chart.

What to Do. Learn on Daily Charts

Even if you use short timeframes in your trading, start your session with a look at a daily chart and estimate the situation. This way you will be able to determine the main trend more accurately and make thoughtful financial decisions.

Mistake #4. No Trading Routine

Trading routine is a product of strong discipline. Without discipline and consistency, you won’t gain stable profits. Novice traders often enter trades prematurely. They don’t have a good trading plan which makes them lose money in a couple of days or even trades.

What to Do. Discipline and Consistency

Develop a good plan. Not only a trading plan but a plan for a day as well. Get some rituals. Prepare an action plan for every possible situation and follow it no matter what. Discipline and consistency are a direct path to success.

Mistake #5. Bad Training

Probably one of the main reasons for failure for novice traders is the wrong training. Today it has become so difficult to extract the right data from a huge flow of information on the Internet. Too many traders call themselves experts and publish strategies which turn out to be a failure.

What to Do. Learn from Professionals

Before you apply any strategy or follow some advice, make sure that it comes from an experienced trader. Or even better - find a professional trader who will teach you Forex. This way you will receive and apply only trusted knowledge and will be able to count on consistent profits in the future.

To Summarize

All traders have come through the mistakes we have discussed in this article. Only a couple of years ago you probably would have had to go through all this yourself. But thanks to the development of the Internet, you can learn from the mistakes of other traders. Make sure to apply the tips from this article to your trading. And good luck!

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terms Stop Loss news trading economical calendar major news release currency pair currency rate national currency trading journal trades profit/loss emotions news release positions size Expert Advisors platform trading robot cryptocurrency volatility day trading position size lot account types cent accounts Mini account ECN Copytrade ECN accounts swap-free minimum deposit order execution liquidity providers demo accounts real account low-risk trading EUR/USD economic calendar majors cross-currencies exotic currencies base currency quote currency quotes bid ask Brexit United Kingdom European Union GBP Euro GDP WTO price levels moving average 4-hour chart 1-hour chart bulls bears false breakout cross-currency USD price action pin bar trading inside bar trading hands off breakeven stop loss 50% stop loss pin bar high-frequency trading position trading swings breakout strategy trading style Entry order Take Profit hammer shooting star inside bar pinocchio bar head and shoulders harami risk to reward ratio trading calculator trader’s age emotion control stop-hunting false signal trading session New York session Asian session non-farm payrolls fed rates decision central banks mentor teacher Forex education Forex books candlesticks bonuses tradable bonus no deposit bonus deposit bonus cashback pending orders counter-trend trading risk-to-reward ratio 1-2% rule uptrend downtrend news releases slippage emotional trading stop orders limits orders trailing Stop correlation Correlation Matrix EURUSD EURJPY RSI Overbought/Oversold indicator doji morning start candlestick pattern liquidity London session gap requote US dollar greed excessive trading Expert Advisor trading instrument Twitter Trump euro canadian dollar japanese yen mexian peso currency pairs Fed China economic news currency wars USA interest rates trade agreement H1 H4 D1 sell trade buy trade price level trading system checklist Default mode network Nonfarm Payrolls intraday traders lot size Stop Out margin breakeven pip point entry price chart candles weekly candle daily candle engulfing candle Doji W1 Coronavirus epidemic macroeconomics markets CNY Bitcoin gold Jerome Powell fears money management trading signals Charles Dow Dow theory primary trend Relative Strength Index signals market noise trading volume oversold/overbought corrections candle M30 GBPUSD GBPJPY pending order fundamentals Interbank order Stop order Limit order Standard account Interbank account liquidity provider M5 chart XAUUSD Chinese yuan flat US Dollar Fed Interest Rates inflation level XPTUSD platinum XAGUSD silver USDCNY Chinese Yuan instruments swap trading hours Buy Stop Sell Stop Average True Range ATR range sideways range price level trading scripts Excel tables entry point equity balance applications highs and lows RSI Fibonacci terminal server proxy OS Windows XP self-trading Forex advantages gap trading Fibonacci levels USDJPY Buy Limit Cherry Blossom market cycle mark-up mark-down consolidation distribution long positions short positions double bottom triple bottom double top triple top pattern signal presidential cycle Elliott wave Kondratiev wave Forex terminology quote standard lot mini-lot micro-lot cross pairs exotic pairs counter-currency terminology Margin Call long position short position buy sell candlestick chart bar chart line chart range market channel high low ADX OHLC patterns profit level martingale aggressive EAs VPS demo account EA tester MeaTrader 4 trading signal chasing the market clicking the button COVID-19 oil trading lot EUR cent account Forex mentor novice trader emotions control fear psychological level round numbers Key Levels indicator MetaQuotes iOS Android mobile trading mobile terminal VPS server financial portals day trader position closing short timeframe fast trading news site news portal FXStreet Investing.com Forex Factory ForexLive DailyFX CPI PPI economic indicators Non-Farm Payrolls monetary policy FOMC retail sales inflation rates program installation intuition apps ECN brokers market makers financial markets indices commodities stock metals trading robots Forex mentors confidence bias low-frequency trading set and forget end-of-day trading exit trade auto-trading OCO trailing stop auto-management competitive advantage partnership IB referral Introducing Broker Sub-IB EURGBP EURCHF Donald Trump Twitter exotics minors trading patterns wedges pennants triangles breakout trading range trading confident trading trading goals japanese candles stars morning star evening star Japanese candles inverted hammer hanging man abandoned baby spinning top spinning bottom bars harami cross engulfing belt hold sandwich piercing line dark cloud cover marubozu three black crows upside gap two crows inverted head and shoulders trading figure trading pattern spike bearish spike bullish spike Mrs. Watanabe beginner trader carry trading young traders women traders figures diamond divergent triangle symmetrical triangle reversal signal morning routine unusual trading tips useful habits breathing techniques meditation nutrition intermittent fasting productivity self-discipline multitasking rectangle sideways channel continuation pattern trend figure Alexander Elder John Murphy Jack Schwager limit order Three indians leaving Forex useful tips motivation on Forex risk trading consistent profits initial capital potential profit golden rule enter trade starting capital initial investment overtrading reverse pattern rounded bottom rounded top saucer inverse saucer financial intelligence financial education long-term investing investing high volatility