5 Classic Mistakes For Beginners of Forex :

The foreign exchange market is attracting more and more individuals wanting to take advantage of the financial opportunities it offers. However, among these novice traders, only a handful eventually realize profits. To help you to be among the few elected, we propose 5 errors generally committed by the new entrants of the forex.

Error n° 1: Dealing with Training

Forex trading is a challenging activity that requires a solid foundation of skills and gold knowledge, many beginner traders tend to ignore this long and tedious work and start unprepared on the market. The result is rarely convincing. To hope to emerge victorious from the forex, it is imperative to be well trained.

Error n° 2: Use too much leverage

Leverage is an incredible trading tool. It has the power to multiply gains. Most brokers offer levers of up to 500: 1. This being said, it should be used with caution because it has exactly the same effect on losses as it gains, it multiplies them. When starting, it is preferable to be content with a lever of 50: 1 or 100: 1.

Error n° 3: Too diversify its portfolio

When starting forex trading, it is best to focus on a particular currency pair. Negotiating multiple assets at the same time caters more to experienced traders. Generally, the most common pair when starting is EUR-USD. You will find on the internet everything necessary to predict its trend (analysis, calendar of economic announcements, etc.).

Error n° 4: Abstain from setting up a money management system

When you start trading on the forex, you can end up jeopardizing 20% ​​of your capital without realizing that this is a huge mistake. Indeed, it is generally advisable to risk only 1 to 2% of his trading account.
Developing a system of money management makes it possible to define a set of rules with the aim of protecting your trading capital. Without it, your chances of succeeding are tiny.

Error n° 5: Do not close a losing position

Cutting a loss amounts to admitting that we were wrong. It is not easy but it is essential to succeed. Indeed, maintaining a losing position in the market and ultimately hoping that it will eventually win again is a mistake. The risk is that the trend never reverses and your loss becomes too important to be overcome.

By avoiding these five common mistakes, you are putting more chances on your side to successfully enter the forex market. However, know that there are many others then, continue to explore the different aspects of forex before you really start.