The first psychological error committed by the traders in Forex, novice or more experienced, is to blindly follow the trend without using the common sense and logic. A given economic released, a new last-minute broadcast on the radio or on the T. V, a brief gap on a chart and many other things will trigger the precipitation among most of the forex traders, who are rushing to be the first to enter the market. It is often said that the trend is the best friend of the trader. But as a trader of forex, you have to remember that you need to follow the trend of the exchange, not to be the first to enter the market after the publication of news or data.
Enter markets too early
Wait until a trend is clearly emerging on the market before you access it and follow it. You can’t go ahead and enter just simply because you think the market is going to adopt a trend.
For example, you enter into a trade on the basis of the first report published, without waiting for other reports from other agencies.
Another example is that of the traders who closely monitor the charts and enter the market as soon as the first movement a little bit significant. These traders are in a state of frenzy and do not take the time to understand what forces are at play to cause such a movement. And when they realize that it was a false alarm, it is already too late, and their position shows a loss.
If you want to succeed on the foreign exchange market, don’t be too eager to enter the market and learn how to hold your elks to get more profit. Take the time to analyze the impact of the economic data published, if you’re trading based on news. If you are trading based on technical analysis, then you need to wait for the price to be in a configuration solid, what happens in general in the wake of important news.
It is generally said that the trader of forex is driven by the greed to make high profits and constant on each trade. If this were not true, the forex market would not be the largest in the world. In forex, it is not really difficult for a trader to be relatively reasonable and experienced to pull a profit each month. But what makes it lose most of the Forex traders, it is their greed. The majority of them is on the point of getting returns are decent investments, but again greed takes over and most Forex traders start playing at a certain point because they are not satisfied with a reasonable profit.
If you want to reach the level of those who earn millions in Forex you have to create similar conditions: the trading strategies do not work if you do not choose those who match your profile and your experience.
In the current economic environment, most of the currency pairs fluctuate between 100-300 pips every day. However, this does not mean that you should/can take advantage of all price movements. Agree that some opportunities escape you.