Top 3 Forex Trading Mistakes

Forex trading in Dubai is one of the most exciting investment ventures to be involved. The mind-blowing challenges, economic riddles and most especially, the potential sky rocketing profits you could make while sitting in the comfort of your office chair – these are all put together in one profession. If you’re a newcomer in this massive financial market, then it’s important that you make yourself aware of the universal mistakes that can easily ruin your Forex trading venture. These mistakes are costly and even the most courageous beginner may tend to leave after all his capital had been wiped out.

So, here is the summary of slip-ups that every Forex trader should be aware of and avoid:

1. Overtrading

A lot of new traders often think that in order to make huge profits in just a short period of time, they should trade all the time, even when there is no good trading opportunity evident. While trading more often would likely increase your chances of making profits, remember that the Forex market is so volatile and changes direction all day long. Because of this, it’s not a good idea to trade frequently as you can’t expect winning trades from every price movement. Depending on your style of trading, good opportunities to trade can strike a few times a day, sometimes even a week. It’s highly advisable that you give yourself enough time to plan things out before making a trade.

2. Not Having a Trading Plan in Place

This mistake is so common among beginning Forex traders. Not having a detailed trading plan can lead to disaster as this could cause a trader to trade based on his emotions – and this is a surefire way to end up losing the game. Devoting some time to come up with a detailed trading plan which includes when to enter and exit the markets among other variables, is advisable before conducting any trade. And remember, every trader is unique and requires different set of approaches. So figure out your trading style and craft a trading plan that you are comfortable with.

3. Risking too Much of Your Capital

Forex trading is not exactly a get-rich-quick scheme that the advertisements would have us believe. Forex is a real business that takes a great deal of discipline and patience. And unless you accept that sobering truth, you won’t succeed in this business over the long term. Every dollar you invest in the Forex market must be a dollar that you can afford to lose, a dollar which will not leave you begging at the streets for spare change when you lose it. Remember that your first job is to protect your capital. Making profits is only second. That being said, instead of risking too much and praying for it to turn into a goldmine, it’s more important to focus on good entry techniques and understanding the trend.