The 4 Biggest Day Trading Mistakes
Why is it that some people fail miserably in the world of Forex day trading? Is it because they just have bad luck? Probably not. The main reason is because they keep making the same mistakes over and over again.
Many people enter the world of Forex day trading because they falsely believe it to be easier than other types of day trading. They see it as a quick path to riches, where in the space of just one day a single trade can make them rich.
It never happens though, as they keep making mistakes like these:
Not being well prepared
It’s impossible to make the right decisions on a consistent basis if you are not well prepared at the beginning of a day of Forex trading.
Some people start their day in a bad mood. Others are still angry about the trade that went bad yesterday.
If any issues are still affecting you mentally before you start trading, you need to clear your mind. If you don’t have a clear mind then you are more likely to make bad decisions which lose you money.
Not having a trading plan
Many beginners to Forex day trading don’t have any kind of plan at all. They mistakenly think that the real money is in that one big trade, and they spend all their time chasing it.
Day trading is just like a business, and it needs to be treated as such. Having a plan in place keeps you focused and accountable. At the end of days trading you can see exactly what you have achieved, and where your strong points and weak points are.
Not having patience
This one is big. Unfortunately, there are not many Forex day traders who display much patience. They want to start making huge amounts of money…and they want it NOW.
Having no patience leads to a shotgun approach, with your attention being pulled in lot’s of different directions and the anxiety building up with every trade that doesn’t hit it big.
Instead, you want to get rid of any outcome dependency, and start to have more patience with your Forex day trading strategy. This will increase your focus and actually increase your profits faster.
Reacting to news stories
A lot of Forex day traders seem to base their entire strategy around entering the market right after a big news headline breaks.
Sure, this can be a solid strategy…if you know what you’re doing and you have a solid plan to back up your actions.
However, most people have no real clue what they doing, and in a time when the marketplace experiences very large swings, it’s a recipe for disaster.
Even a trade that is a “sure-thing” can turn extremely quickly, often bringing huge losses to people who expected a windfall.
It’s okay to make the above mistakes. Just about everybody does at first, and even the most successful Forex day traders still do from time to time. Nobody is perfect, we are all human and make mistakes.
The key is to realize when you are making these Forex day trading mistakes, and then course correct to a better approach.