The forex market, which has started to invest with great hopes, is experiencing big losses due to a few important reasons. This is not just forex market specific. Because investing requires having some competencies. For this reason, he tells you that you must go through an educational process before you start investing. By taking part in trainings related to the market you will process, you have a great proposition to use yourself to develop demo accounts from today’s possibilities.
There are some key points that cause Forex traders to suffer. Some of these points arise from the inability to use the advantageous trading conditions presented by the market. Forex, the trading features that distinguish it from others, provide a high profit margin in the short run. But if you can not use them correctly and make a high profit ambition, you will suffer great damage. One of the most important issues at this point is to be able to control your psychology. If you manage to make an investment without ambition and without haste, you will have taken a big step.
Now let’s take a look at the points and the precautions for forex investors to suffer:
The Forex market has a transaction volume close to $ 10 trillion per day. This transaction volume shows faster price changes than other markets. This is where the importance of being an experience owner arises. If you can not keep up with the Forex market, winning will be a dream. For this reason, you should definitely have a certain experiment before you start forex trading. Demo accounts will be your greatest help to gain this experience.
You can earn forex experience without taking any risk thanks to demo accounts that make it possible to trade in real market conditions with virtual money. Demo accounts have $ 100,000 in virtual money and this is the only issue that is different from the actual market conditions. You can see how you will move against the fluctuations that are taking place by doing buy / sell transactions with the defined virtual money in the demo account. Already in our country, it is necessary to use demo account to start forex trading. Before you start investing in real money, you will need to do a minimum of 50 transactions in demo accounts for at least 6 business days. You can also measure your level of experience by taking into account the loss – gain ratio you have in these transactions.
If you enter the forex market with the intention of turning the corner with a few operations, you can not get anything more than a loss. Yes, the forex market is a lucrative place; But that does not mean you will be rich with a few operations. You will earn money in proportion to the deposit you have deposited. At the same time you need to act with good knowledge and experience, strategies, sound psychology, disciplined. Without providing them, it would be an unreasonable thought to enter into unrealistic snow expectations.
Forex market leverage rates can not make you rich in a short time. By attracting the leverage ratio, you should not think of being rich with a few things you do. You have to act in a disciplined and planned way for a good investment, and you have to realize your investments without ambition. You will disappear like a cloud of dust on the forex market due to ambition.
Do not create an investment plan
Before you start trading and creating a position, you need to create a good investment plan. You have to think in detail about how much collateral, what size you will trade, and how much profit and loss you will get. You must do research, analysis and market follow-up for this. As a result, in the light of the information that you will get, you should create an investment plan for yourself. If you do all the operations through a certain investment plan, you will easily encounter losses.
You need to create your investment plan in two ways. The first should be for the transaction to be made. The second one should be in line with your investment objective in general. If you can create a plan like this yourself, then you will perform successful investment transactions and meet your expectations. You will have to plan your plan by considering the money, the duration, the investment vehicle and the leverage ratio to be used in detail. You should also add your plan to the exit strategy and determine the lower and upper limits of the process. You should create a plan by including the position at which level you will cover and the rate of loss you can assume.
Not having discipline of transaction
You have to make your investment transactions in a disciplined way within the plan that you create. It is necessary to make your investments by adhering to the plan that you are patient and create, in order to get the profit you expect. When you create a position and there are price fluctuations, you can make a second move to catch the developments on the market. For example, you can plan to achieve a higher profit by continuing the transaction when you reach the profit you expected in the transaction. But it’s a very risky move, and you can lose your profit by staying in the wrong position at any moment.
You should include your profit and loss limits you set before entering the process, depending on the specific reasons. You should not make emotional decisions and determine the levels of profit and loss, depending on realistic reasons. Especially when you see a fluctuating course on the market, you need to control your emotions. Your plan should show a disciplined approach to alignment and take market conditions into account at all times. Sometimes you may encounter exceptional situations in the markets and things may not go as planned. Against these situations you should guard your calm and see what you can do without panic.
Stop Wrong Damage / Take Profit Levels
Among the best features of the Forex market are the levels of loss stop / profit taking (orders). When you correctly determine these levels, you do not encounter unexpected losses and your process automatically stops at those levels. You need to analyze your price graphs to determine these levels. You can determine these levels with the signals you will receive as analysis results. But you can get incorrect levels due to an error or lack of analysis. For this reason, the receipt of the stop loss / profit received will not be useful. By learning how to make a profit / loss account on the Forex market, you can make orders at the correct levels.
Stop the damage / get the positions of the profit levels, too much if you change it wrong. You should take care not to change these levels after you set them before starting the process. It would be much better to evaluate the advantageous position you see instead of changing it in another position. With these levels you determine at the beginning of the process, even if you are not at the beginning of the screen, your position will end within your expectations and your profits will pass.
Using High Leverage
Leverage rates, which are the most attractive feature of Forex market, may be your problem. Because of the opportunity offered, you may have the ambition to earn money and experience a great loss due to momentary carelessness. Especially when the forex market is still a novice, it is necessary to use leverage or small leverage. It is also useful to use leverage for an operation that you plan very carefully.
Every term in the investment market means high profit – high risk. So if you want to earn a high profit you should also know that you may face great risks. If you do not have the ability to take these risks, you should aim for a minimal profit. As your experience grows, you can imagine greater profits by learning to cope with risks.
Opening Multiple Positions – Making Frequent Transactions
While still a novice trader on the Forex market, trying to manage them by opening up a large number of positions will make your business difficult. Since it will be difficult to control open positions, you will lose sight of your losses while waiting for a few points to win. For this reason, your experience will be useful to take notes, take notes, take a break, and get much better results in the future instead of doing as many transactions as you do.
Knowing to not take a break in investment transactions is a very important issue. Trading with a large number of frequent intervals with monetization will cause you to consume your collateral as losses will increase. After a few transactions you have done, it would be much better to look at the profit / loss ratio you have achieved, see what you are doing and what you can do to get better results. When you are new to the market, you will follow such a path, make both your own money management and the same mistake that you will not fall back over again.
Keeping open positions
Another mistake that novice traders often make is that they think they can save it by keeping the damaging process open. This is quite wrong and keeping the damage position open for a long time will increase the loss rate. You will have consumed your guarantee without knowing what else is even after your loss. It is best to close the damage position after you have fast eye contact. You need to store the compensation for the operation in other processes. It is not possible to compensate for the same process, and things can get worse.
When your open position is damaged, you have to stay calm, make a sudden decision, and panic to make mistakes. For this reason, you should know that you can always suffer losses when investing and you can stay calm. You should end the process in the shortest way against the damages you are comparing and find out where you have made mistakes. By identifying your mistakes, you need to get rid of the missing ones. But in this way you can perform your transactions as a successful investor.
Understanding Spread Rates
The difference between the buy and sell prices in Forex market is defined as spread. As you would expect, the spread rates will also change constantly depending on the change in buying and selling prices. This change affects every open position. You must know and be aware of the spread of the spreads for a day. The spread rates may change at any time and may affect the direction of your transaction. At one point, for example, it may be the case that your loss is suddenly profitable.
Spread rates; The liquidity situation of the investment vehicle and the movement of the forex market. In cases where liquidity is low, the difference between buying and selling prices may increase. For this reason, the spread rate increases. Before significant economic data to be disclosed at the same time, there is much change in spreads at the time of disclosure of data and afterwards. At the same time, there may be an increase in spread rates during market opening hours. You should know these situations and adapt yourself to spread rates.
Getting to High Profit Expectations
One of the most important issues in the Forex market, which will bring you in contrast to your thoughts, is the sweat. Because of your money-making ambition, you make a lot of mistakes and you will lose yourself from the action you expect to win. Waiting to win by doing a lot of trading with high profits is bad forex trading behavior. Instead of following a path like this, you have to stay calm and prepare yourself in a disciplined manner. If you follow such a path, you can reach the profit target you expect with a small number of operations.
If you get caught up in high profit expectations, you will not see the mistakes you make, and you might think that forex market does not win. It is also at the beginning of the mistakes to think that you will increase your profit rate by using leverage at high level. When you lose due to high leverage your balance will not be reset; But the current risks will increase and you will face a bigger loss. For this reason, you should always keep your calm, study the markets well, plan the processes you are doing, progress in a disciplined manner, stay away from turmoil.