Friday, June 20, 2008

Mistakes that forex traders make

When getting started in forex trading, there are some common mistakes that the investors to be avoided. The list is below:

1. Over Trading: Over trading occurs when traders try to look for trading chances that are not really there. It happens to new traders oftenly, because they just want to trade. The result is usually a poor one that results in loss. Over trading can also result in traders making too many traders at once and using too much margin.

2. Using Too Much Leverage: One of the biggest advantages of forex trading is the ability to use leverage or trading on margin. One of the most common mistakes that the traders make is using too much of leverage. Using too much leverage again your position by just a small amount, it can result is a very huge loss. Commonly, the beginning traders will get emotional and nervous and close the trade for a loss.
3. Picking Top and Bottoms: Many of the new traders will attempt to try to pinpoint where a currency pair will turn around and start moving the opposite direction. This is something that is difficult even for the most professinal and experienced traders.

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