Forex common mistakes

TheDawn said:
Never ever never EVER open an account or trade with brokers that operate in a market-making model that trade against you and not remain risk-neutral meaning that you can only profit if they lose. There are brokers that operate in market-making model and trade against you but they remain risk-neutral by hedging against their net exposure to their clients' trade so they remain indifferent regardless of whether you win or lose. An example of such a broker is Oanda. This is VERY VERY important. If you are not able to make a profit, what's the point of trading? Trading is not playing in a casino where it's an entertainment venue and you are expected to lose.
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It was a really helpful comment, lets check if I am using the correct brokerage or not! (of course I wont name them, just wanna be sure that I am applying your points)
They have fixed spreads and they do not change it during news or .. They are regulated and I can trade with them on their platform. I think everything seems good up to here, could you name some of the other points I have to takin into consideration?
TheDawn said:
. Unless a currency is paying you high overnight interest that's higher than overnight charges that you pay on holding positions overnight, ALWAYS close all positions before the market closes. Never hold any positions overnight. With some currencies, overnight charges could be high and unless you are anticipating a huge gap up/down that will land you in significant profit, it's not worth it to hold positions open, incur the hefty overnight charges and deny yourself a good night's sleep.
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Even if they are swap-free? I thought I just should not open trades when they charge me for swaps. And are EURUSD and USDJPY examples of the pairs you mentioned?
 
Franziskaschulz said:
It was a really helpful comment, lets check if I am using the correct brokerage or not! (of course I wont name them, just wanna be sure that I am applying your points)
They have fixed spreads and they do not change it during news or .. They are regulated and I can trade with them on their platform. I think everything seems good up to here, could you name some of the other points I have to takin into consideration?
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You need to ask them specifically if they take the other side of your transaction or pass your orders to be executed by a liquidity provider and if they do take the other side of your transaction, if they hedge against the net exposure of their clients by being risk-neutral or not. Ask them these specific questions. "Fixed spread and do not change during news" or regulated means nothing. Gain Capital is regulated but they still trade against you and do not let you profit against them.

Franziskaschulz said:
Even if they are swap-free? I thought I just should not open trades when they charge me for swaps. And are EURUSD and USDJPY examples of the pairs you mentioned?
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Wether a pair charges you for swap changes all the time. It depends on whether the currency that you sell is paying higher interest than the one that you buy or not. You are always selling and buying or vice versa with one currency over another when you are trading forex.
 
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TheDawn said:
You need to ask them specifically if they take the other side of your transaction or pass your orders to be executed by a liquidity provider and if they do take the other side of your transaction, if they hedge against the net exposure of their clients by being risk-neutral or not. Ask them these specific questions. "Fixed spread and do not change during news" or regulated means nothing. Gain Capital is regulated but they still trade against you and do not let you profit against them.
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Wow! Thank you. I heard that regulation does not mean that a broker is doing well! I'll go and ask the questions you mentioned from their support team and I'll inform you of the result (if any other questions arise)
 
Franziskaschulz said:
Hello again!
I am enjoying being a part of this community! You are really helpful.
Today I am going to ask another question, What mistakes do you think you would have avoided if you had the knowledge you have now when you started trading forex, and what advice can you offer to a beginner in forex trading?
I think that will be really helpful for me when I finish my break and want to start trading again!
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One of mistakes I avoided was lack of trading plan . Trading without a clearly defined strategy is dangerous. Create a trading plan that outline your goals and your personality ( and maybe your budget!!)
 
I made over $ 10,000 on just subs trading Forex on C2. The main mistake I would suggest newbies avoid is opening an account with a Forex broker that keeps the trades within their own ecosystem to spike you out of a position. One of the way I was able to achieve a 65% win ratio was going for more pips than a normal trader. Going for just 5 or 10 pips is a losing strategy. You need to be always looking for at least 30 pips or more on a single trade. What also helped was trading other peoples money. Finally what helps now is always making money by also having a job. Also, I only trade at night when the people on the other side of the trade are too sleepy to fuck with me.
 
Common mistakes in forex trading include:

  1. Lack of proper education and understanding of the market, leading to uninformed trading decisions.
  2. Failure to implement a solid trading plan and risk management strategy.
  3. Overtrading or trading based on emotions rather than objective analysis.
  4. Neglecting to use stop-loss orders, exposing trades to excessive risk.
  5. Chasing losses or revenge trading, trying to recover previous losses quickly.
 
number1 which most important from all , lack of education is the foremost reason why traders doing losses day by day. its not a common mistake , its a major mistake
 
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