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7 Easy Steps to Becoming a Forex LOSER

Apr 24, 2008
You're smart, you've conquered every market so far, and just because most casual traders lose money, doesn't mean you will, right? You can just fly by the seat of your pants and win along the way - wrong!

Forex market doesn't beat so many traders because they're not intelligent people, but the Forex market is such a different market that a tested and proven system is absolutely essential to making good money in the Forex.

Here are seven common mistakes that new Forex traders often make, also known as 7 easy steps to becoming a Forex loser:

#1: Following your gut. It may work for winning $20 off your buddy off the occasional football game, but the Forex market is a market, not a sporting event. Following a "gut feeling" that isn't founded on research, analysis, or a system is a sure fire way to lose and to lose big in the long run.

#2: Not anticipating changes from the demo trading to real life trading. There is more than one way this can negatively affect a trader. A trader can become squeamish when it's real money and hesitate, causing them to lose.

Or the opposite can happen: a trader can be over aggressive in demo and assume that when they're more cautious with real money, they won't lose. Plan on additional pressures when dealing in the real market, otherwise if you don't you'll definitely be a Forex loser.

#3: Not having a clear trading strategy. You have to have a clear trading strategy, aka a tried and true trading system, in order to succeed in Forex. You can't just use one method one day, and a completely different one the next.

A consistent proven method is how you'll make money in the Forex. Knowing exactly how your strategy works, to the smallest detail, is what will determine whether you succeed or not.

#4: Not confirming potential trends with technical analysis. Not all mistakes are made by complete newcomers. Once you get good at identifying patterns just by looking at a chart, it might be easy to go by look and not go through the technical analysis to confirm what you see. This would be a mistake.

Technical analysis not only can help confirm you're in a breakout, but can also warn you when the other signals in the market suggest it's a weak or false movement. Not confirming your trend is a huge mistake that can bust you in no time flat.

#5: Completely ignoring all fundamental analysis. Even the most successful, die-hard technical analysis traders are going to pay attention to the economic reports. Technical analysis is great, but those reports will always affect currency.

A market may be trending up, but if there is a surprise interest rate drop when the expectation was a raise, well, you're going to be on the wrong side of a beating if that takes place and you don't notice.

#6: Focusing on one currency. There is an inherent problem with this. Forex is currency trading with pairs. Just because a currency is doing well against most currencies, doesn't mean it is doing well against all of them.

For example, the USD could lose 20-40 pips against the Euro, British Pound, and Canadian Dollar, but go up 40 pips against the Japanese Yen. Seeing mixed results in currency pairs is, in fact, more common than not.

#7: Emotion & Fear. After you get burned a few times, it can be hard to get back into the fire. Especially if you did your homework, found some good indicators, and what looked like a good situation ended up as a bad trade.

It happens. You can't let it get under your skin. Letting too much fear under the guise of "caution" will make it impossible for you to be a Forex winner.

These are 7 steps to becoming a Forex loser, a road all too many traders have gone down before. Finding a great proven trading system can help to ensure that you don't make the same mistake.
About the Author
And now I would like to offer you free access to a Forex trading system that is 89.1% accurate, so you can literally start trading the Forex today. You can access it now by going to: http://www.foreximpact.com/reports/89percent/

From Jason Fielder - Founder, ForexImpact.com
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