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Monday, September 16, 2013

Forex trading mistakes and traps(5-Trading real money too soon or gambling it)

The urge to jump into the market and start trading real money is often too much for most traders to withstand. However, the truth is that until you have mastered an effective Forex trading strategy like price action trading, you really should not be trading real money. By “mastering” the strategy, I mean you should be consistently successful with it on a demo account for a period of 3 to 6 months or more, prior to going live. However, you don’t want to use demo account trading as a crutch…trading a real account is different due to the real emotions involved, so just be sure you switch to real-money trading after you have achieved success on demo…don’t be afraid of trading real money, because eventually you will need to make the switch to real money trading.
Also, be sure you are not just gambling your money away. Doing the things we discussed above; over-trading, over-leveraging, not having a trading plan, etc, these are all things that gambling traders do. Traders who don’t gamble in the markets are calm and calculating…they have a trading plan, a trading journal, and they know exactly what their trading edge is and when to trade it.

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