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Sunday, July 16, 2017

The Biggest Problems in Forex Trading




The more you know about Forex Trading the more you see that there are a lot of problems that come together with it.

Newbies might not realize those kinda problems because some of them just don’t know if they are actually going to face a huge loss.

While experienced traders sometimes can get too scared in entering the market because they came with bad experience in the past that (sometimes) teach them some lessons.

These are some of the biggest problems that are common in Forex Trading and tips how to handle it.



Overtrading

Normally driven by greedy or anger because somebody just lost some money in forex market. Overtrading may lead you to a huge loss.

Tips: try to set a target. For daily or weekly or monthly. Once you achieved the target then it’s time to step back from the market, take your time and think for the next strategy. Remember one thing, it is better to develop “Steady Profit” than to think about getting HUGE PROFIT at once. Even if you have a small profit, let’s say only 2% of each month, when you are able to maintain this amount in monthly basis then you are already one step to being professional.


Poor Trading Strategy

One day, John Doe figured out a holy grail strategy to enter Forex Market that he thought could lead him to be Millionaire in less than a year. He got a lot of profit and the next month….. He’s Broke….
What?....
How come???

Tips: There is no such thing as the holy grail in Forex Trading. A good strategy for today may not be a good strategy in the future. That’s why you should never stop learning in Forex. When you think your strategy is no longer profitable, it’s time to step back from the market, rethink about your trading strategy and test that strategy using demo account before using your real account.






Risking too Much

Although you have the capability to increase the volume of each trade doesn’t mean that you can go as high as possible since the risk will be very high as well. A lot of forex traders lose their money in a second just because they are risking their money for too much for each trade.

Tips: Don’t increase your risk per trade until you have doubled the amount of your account.



Reading too Many Variables

Sometimes the more experience you are in a particular thing the more stupid you will feel you are. Well, it happens also in Forex trading, the more you know about technical indicator and economic news, the more you want to analyze things just to make a decision whether you should buy or sell.

Tips: don’t over-complicate things in Forex. If you think market is too volatile to be analyzed then do not enter the market and wait for better chance to enter the market so it would be easier for you to make an analysis.


Cannot Control Emotion

Let’s face it. Most of the times we made decision in life based on emotion… well, that’s normal, we’re humans. The most important thing is how to control our emotion so it won’t destroy our decision in trading Forex.

Tips: Be a disciplined trader. Make rules based on your trading strategy and stick to it. And once the rule is no longer profitable enough for you, step back and rethink your strategy and the rules and stick to it.