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Forex Stock Trading

Five Common Forex Mistakes

Beginners are especially prone to making mistakes in forex stock trading, but even experienced traders are known to occasionally slip up.

1. Letting emotions get the best of you. It’s key to devise a trading plan and stick to it. By not letting greed get a grip on you, you’ll happily take profit when you can. Taking a profit is better than not taking one at all. At a minimum, you can take a partial profit in case a larger move is in motion.

2. Trading with the same plan for all currency pairs. Each currency pair has its own unique nuances and trades differently from the next pair. By understanding one or two pairs in depth, you’ll be able to more confidently predict upcoming moves. If you don’t know the nuances of a pair, don’t trade it. Stick to what you know and don’t overtrade.

3. Making stop loss errors. Two stop loss mistakes are common: not having a stop loss order in place, or changing the stop loss order out of emotion. You want to limit your losses, not make them worse. Set your stop loss and leave it alone in forex stock trading. It’s smart to get out of a losing trade while you still can. This is true for any stock trade forex agency and system.

4. Not making a plan. If you think that you can trade by intuition and by flying by the seat of your pants, you’re in for serious trouble. You need to determine ahead of time what your entry point is and what your take-profit departure point is. By watching the clock, you’ll be able to predict which way prices are going to go.

5. Not watching the news. In forex stock trading, it’s key to keep track of how the dollar is doing and know if a central bank announcement is coming up. Currencies trade differently depending upon holidays and market closing times; being unaware of new information is cause for disaster.