3 Things NOT to Do If You Want to Succeed in Forex Trading

Too many new forex traders make these 3 big mistakes. Make these blunders and you'll blow your chances of forex success.

1. DON'T miss the step of trading on a demo account before using real money. Your broker should let you open a demo account where you can practice forex trading without risking real cash. Your demo account is where you learn about placing orders, monitoring your trading positions, getting in and out at the right time, and more.

Every forex trader wins some and loses some. The big difference is that although you won't win real cash, you also won't lose real cash.

It's hard for new traders to get their heads around the idea that they will lose money in forex, no matter how good they are. All traders have losers, and don't believe anyone who says they don't. Just plan to win more trades than you lose and you'll be fine.

So DON'T start with real money: DO start by trading a demo account.

2. DON'T be conned into putting all your trades in the "hands" of a robot. Forex trading robots can let you trade even when you can't be at your computer, and that makes them a great tool.

But not all robots are created equal. Some are brilliant, others are duds. A robot is just software, and sometimes it will come up with bad answers. If you can't recognize that, your trading will suffer. You need to know when the robot you are using is coming up with the right trading signals, and you'll only do that when you have educated yourself about forex.

DO make use of forex trading robots, but only after you understand how the market works and how the robots work. Here's some information about a robot that really does work.

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3. DON'T let your emotions govern your trades. Lots of unexpected things can affect currency prices, and sometimes quite dramatically.

You'll often see big spikes or drops right after a major world event, for example, such as an earthquake or other natural disaster, major political upheaval or even the sudden illness of a world leader.

It's easy to panic when these things happen and sell prematurely. At the same time, it's easy to be euphoric over great economic news and start buying inappropriately. Emotion-based forex trading is the way of disaster. Don't do it.

Making good use of technical analysis and trading charts is one way to guard against this. The charts don't lie.

So DON'T trade on emotions or hunches. DO set your trading strategy and stick with it, regardless of world events or runs of "luck".

These principles may seem self-evident, but you'd be surprised at how many novice (and even not-so-new) traders fall into these trips, to their cost. Don't you be one of them.

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