Learning forex the hard way

Forex learning from mistakes

Learning forex is a difficult process because it is more of an art then a science but the outcome is definitely highly rewarding. After the mountain is climbed, the view is extraordinary, all we have to do is to reach there walking on a road full of booby traps. Learning forex is learning how to live: using stop loss and overcoming your emotions without becoming a psychopath. (Yes, I know, they say that psychopaths are the best traders because they have no emotions and empathy but for sure I don’t want to become one).  Now, what are the most common forex mistakes I’ve made during all these trading years:

 

 

1. Listen to experts
Listening to what experts say is the shortest way to failure. For example, right this morning I opened a very well known forex news site and the very first headline was “EUR will fall! USD is getting stronger. Axel Weber’s advice is to sell EURUSD right now!”.
Then, I smiled (lesson learned!) and started MT4. No surprise, EURUSD climbed up by 120 pips and still rising. Every time experts advice something, exactly the opposite happens. Why? Because someone has to lose before they take their money. So, don’t listed to experts!

2. I better stop the trade now while I’m in profit
Don’t do that! If you don’t stick to your plan, you will lose. Stick to it even if you lose one, two or even ten trades. How many times did you stop a trade and the market moved freely in your direction right after?

3. Risk 100 pips for 3-4 pips profit
Don’t do that! Even if you win 30 trades in a row, a single loss wipes out all your profit. This style of forex trading gives you a false sentiment of safety while leads you to disaster. Sometimes, and I mean most of the times, logic goes against your emotional side.

4. Trading manually is much more profitable than using a forex robot
Yes and no, it depends on the trader. I’ve seen forex robots making 50% per month just to fail a month later. So does manual traders. There is no rule about it. If the trader is good, he can sustain his profit longer term. But if the trader is good, he also have enough knowledge to choose a good forex robot.

5. Stop trading and close your positions before high impact news!
News are unpredictable so the chances are always 50/50. I myself don’t close profitable trades, I set the stop somewhere at breakeven. There is no recipe here and the rule of closing them before high impact news makes no difference on the long run.

Perhaps you are tired of taking so many losses but I’m asking you not to give up! Good and profitable ways are hard to walk! But the end of the journey brings you something that most people won’t have. 🙂