POPULAR MISTAKES IN FOREX TRADING

Multi indicators offer the sophistication which are very much attracted by many traders and are used in the forex trading system. Due to the price movement and no value is added to the trade, traders either end up over bought or over sold technical indicators likes stochastic, momentum indicators, candle stick chart pattern recognition, Bollinger band breaks out even neural network which are supposed to be artificial intelligent system. In order to make the signal generated to be correct, technical indicators just show signals which are similar to buy or sell or hold. Base on theory, it may be good. However, in reality to arrive at a conclusion might be difficult. Consequently, traders are confused when producing a right decision. Without being able to make a decision to enter the market, they either enter too late or too early or remain still. The major flaw is due to the use of useless trading system which does not serve the purpose to make profits, but confuses the traders and complicates the forex trading until the trader loses.

An emotional nature interwoven into the process is another dangerous flaw in forex trading. It is fear and greed of the trader. Exuberance and over joy can be caused by profitable forex trade, but this is the time when greed comes in and crosses the aspects of risk management. When a trader is hooked to winning, out of greed he over-rides all aspects to see more and more profits, only to see them crash to earth. They wait for the prices to regain, but in dismay may some time and with worst possible losses. This is the time when fear crops up and paralyses the trader not making him to open up any position. Hence while trading, emotional side of trading should not be overridden, traders should stick to discipline of the trade which can prevent them from committing the flaw of forex trading.

A person or the one who is lazy, or with no drive to gain profits or feels the need to be profitable can be known as an unconcerned trader. This is also one kind of forex trading flaws. These people would have entered into forex trading due to hearing it as an easy game. For them it is not a trade which involves skill, trade management, preparation and re-investment. They consider it as a fun game, where loses do not make any difference. Wrong footing, with a wrong objective can be made by such persons.