Forex Trading Mistakes

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Forex Trading Mistakes

Post  ilearn2t on Sat Apr 07, 2012 10:53 am

Hello Everyone

One of the biggest mistakes a "newbie" does first, is open a "real" mirco account and in their haste to get started they open their first trade by clicking on a buy or sell order, unaware the default setting for an order is 1.00 lot size ($0.10) this might not seem much to most but if a small capital investment is being used, it could be a killer. So take a minute out to change your default setting to the lot size that suits your money management.

To help you in this part, once your platform is active on your desktop, click on the "Tools" tab then "Options" followed by "Trade" in this window you'll see the "Set by default" box change the box number to one that will suit your style of trading, click "Ok" job completed.

But save yourself a lot of stress, and avoid the unnecessary risk of losing money, by simply learning all functions on your platform.

Not having a proper "Money management" program is very risky in forex trading. So plan your trading to take into account "what if I loss" a trade and combining the possibility of numerous losses to risk ratio might just keep your account a float and not sink like most unmanaged accounts.

Example:

(A) $10 investment 1.00 lot size with a loss of near 100 pips = $10 loss (bankrupted)
(B) $10 investment 0.10 lot size with a loss of 100 pips = $1 loss (or 1%)

(B) will allow you to make 5 big wrong trades and still leave around 50% of your capital to play with.

No matter what amount of capital a newbie can afford to lose, it's best to use the smallest lot size possible until you get to know the risks of money management and experience your first big loss.

We could all reply with different examples of now to place StopLoss levels to avoid this happening, but thats alright for yourself, but before we do, remember one thing; Did you ever loss an account simply by placing these safe StopLoss levels, and if so could you explain what money management did you use that caused the account to fail ?

Good luck
ilearn2t

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