Accepted Wisdom in Online Forex Trading Can Loose Your Money – How?

I often read self-professed traders talking about accepted wisdom, and I wonder if these people have already engaged into trading industry.

Here are six of the all time favorite advice that if you follow it… you will loose.

1. Day Trading: A Low Risk but High Reward way of trading

Lots of writers say that day trading and that they are successful at it, but truth is none of them can show their real track record of their profits from the long term trading.

All short term trading is unpredictably random. One can never say that chances are in their favor instead one might even lose and lose quickly.

2. Knowledge is Power

Well this should be: Right Knowledge is Power

In the forex market most traders tend to follow others with their way of trading, some even make it complicated by using others system. Truth is, it is very simple all you need is a system that works for you, confidence to use it and the discipline to stick with it.

3. Buy Low and Sell High = Money

Of course this is what every trader wants- to pick the market and sell the market.

Situation is: Prices swings back and forth to support. If a buyer buys expecting a bottom market to support holds then that is trading against price momentum and you’ll just end up loosing your money the easy way.

What you need is wait for the turn and see when the price swings back up. This may not get you in the bottom market but chances might be on your side.

But then again a trader won’t buy and will wait for a pullback when a breakout occurs on an important market high, of course it will never come and he’ll be left waiting for a big trend soar up away from him. He should have done his move – he should have bought the first break!

Truth is most big trends come from a market of a great magnitude either high or low all you need to do is to follow them.

So….

Buy Low and Sell High = Loosing

Buy High and Sell Higher = Money

4. Listening to the News

Experts are sure to be convincing when they say where the prices should go and it is very believable.

But bear in mind that experts are not traders, they are just entertainers that offers good story and more often that not they’re wrong – so don’t listen to experts, listen to yourself do your decision.

5. Useful paper trade

Use a demo account so you will learn the ropes of forex market without risking money. It can be helpful up to a certain extent –yes, but there’s a limit on what you will learn to be a good trader.

You don’t use actual money on demo account so there is no risk and no pressure, and that is very different on the brutal world if real trading.

6. Trail stops quickly

This is the idea of locking in the profit. Most traders become defensive and get obsessed in locking in profits; they simply stepped out of trade and never get the chance to follow a big trend.

Forex market trading is all about taking risks and if you restrict the risk then you will not get the chance of getting the big profit.

Timothy Stevens is a Forex Options Trader who owns http://www.NonDirectionTrading.com – He has helped hundreds of people on Trading Forex with Options.

He has recently developed a free e-course showing you a step by step process for starting your Forex Trading easier. To learn how to start Forex Trading with Options without wasting your time and losing more money, visit http://www.NonDirectionTrading.com/members/FreeReport.htm