Top 5 Forex Trading Mistakes to Avoid
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#578: Top 5 Forex Trading Mistakes to Avoid
00:33 – What you must do in order to succeed as a Forex trader.
00:46 – #1 You must have confidence in your trading strategy.
02:00 – #2 Forget Pips and understand Percentages.
03:50 – #3 High Reward:Risk trades.
05:35 – #4 Don’t let trading control your life.
06:40 – #5 Belong to a trading community.
07:52 – 17 minutes Masterclass and Book a Call.
08:52 – Blueberry Markets as a Forex Broker.
09:14 – Comments, Like & Subscribe.
Today, I’m going to discuss the five things that you must have as part of your trading plan in order to be a successful, independent and profitable forex trader. Really important this. Let’s get into the more right now.
Hey there, Traders! Andrew Mitchem here at The Forex Trading Coach with video and podcast number 578.
What you must do in order to succeed as a Forex trader.
That’s right today I’m going to give you my five top points that you must have in order to become a successful trader, but a profitable trader and also an independent and knowledgeable trader. So let’s get into it.
#1 You must have confidence in your trading strategy.
Now the first point is you must have full and utter confidence in your trading strategy. You must know exactly what to do when to do it. You must have proof in your strategy that it’s been proven across different markets, across different time frame charts, across a large amount of length of time that you’ve traded that on demo and small live accounts before taking it a little bit more serious on a bigger candle problem.
But you have to have that strategy. Why? Well, otherwise you’re going to doubt yourself. Aren’t you? Going to see something and you go, I’m not quite sure what to do here or you start gambling or you leave a trade because you’ve had a few losing trades. And of course, that’s the one that would have won. And you do all these silly things and you break the rules, you break your plan and it all comes down to having no confidence or a lack of confidence in what you are doing as a trader yourself and or your trading strategy.
It’s because it’s not proven, because you’re not really 100% committed and confident with it. And so to have a trading strategy, you’re fully on board with is the most important thing as part of being a successful and independent trader.
#2 Forget Pips and understand Percentages.
The second point is you must understand risk. Forget pips, do not count your success or your failure on pips is just madness.
Luckily, over the last number of years, more and more people have figured that out. But when I started, everybody talked in pips and I’m talking 20 years ago now. But luckily today people understand percentages of risk. Now, for me, it’s vitally important that you have low and controlled risk on every single one of your trades and it’s equal.
So what that does is one, it gives you peace of mind that knowing that if a trade goes against you and we all have trades, it get stopped in you. No it’s perfect. It’s a part of trading. You got to accept it. But if a trade goes against us that’s fine. Providing that the set up that we took at the time look good and you can have some fantastic looking trade setups.
And sometimes the market goes against you. Something happens, news announcement, somebody says something, whatever it is and the trade just goes wrong, that’s that’s life. Okay? But if the trade goes against you, you have to know that you lose a set low and pre known amount as a percentage of your trading account. Therefore it doesn’t matter if you’re trading $1,000, $10,000, $100,000, $1 million, it doesn’t matter.
It’s still the same percentage risk. It also means that it doesn’t matter whether I’m trading a monthly chart or a 15 minute time frame chart. For me, my trades all have the same risk. So as an example, it’s that 15 minute chart trade was the profit or the monthly chart lost all the other way around. It doesn’t really matter.
I know how much I’m losing as a percentage of my account on either of those two trades. They have equal and low and known risk.
#3 High Reward:Risk trades.
The third point you have to have leading on from that is high reward to risk trades. You’re never going to make money if you have trades that make less than you risk. It’s just hardly going to happen because you’re winning percentage needs to be absolutely perfect.
It’s hardly going to happen. So a lot of the times I see people at their. One they’re trading on two shorter time friend chart, and it means that they have a real struggle to gain a high reward to risk from their trades. You see the high the time frame chart in general, the higher the reward to risk you can get out of the trade in general, not all the time, but that would be a pretty general thing to suggest.
And so if you are trading, let’s say 2 hours, 4 hours, 6, 8, 12, daily, weekly, monthly, you’re going to get yourself a lot, lot better reward to risk as you get higher and higher timeframes. Then if you’re trading, say, hour charts or 15 minute or 5 minute or anything like that. And so having high reward to risk is crucial because it means you can have, let’s say, two losing trades, one winning trades, a net gain.
You’re still making a large amount of gain again in a percentage terms. So a little bit like the reward to risk. It doesn’t matter what the time frame or how big the stop loss is in terms of pips. You’re providing that your gain is multiple times your risk. Your profitable trades will have, let’s say, high 5% risk, maybe one and a half to 2.5% gain for a half percent risk.
That’s what I mean by reward to risk. So you have to have that in your favor. Just little small losses, big gains, little small losses, big gains. That’s how you’re going to achieve great results as a trader.
#4 Don’t let trading control your life.
The fourth point is you must be realistic about your trading. Does your strategy and the way you need to trade it to be successful? Does it work in like properly with what else are you doing with your family with, you know, sport, music, you know, kids travel, work, you know, whatever it is that you do, hobbies, you have to be realistic about this. And so I think it’s really important that you look at, for me, my strategy, I only look at a trade on the completion of a candle.
So that’s a daily chart. I just need to look once a day. If it’s a 12 hour chart, I just need to look twice a day. See what I mean? 8 hour chart three times a day. I don’t only look once a day on those because of times of day. It has to be realistic for where you live.
Doesn’t matter that I live in New Zealand, you may live somewhere else. Doesn’t matter that the market opens in New York. Forget that we can all trade like the longer timeframe charts. That also leads on to one other point that I haven’t put on here. But for me, the importance of high reward to risk means trading in limit orders as well. I’ve made another video about that that you can find.
#5 Belong to a trading community.
And lastly, point number five, this is not an absolute must have, but I think it’s vitally important for people, especially if you’re newer to trading and it’s about having support. It’s about having a network of people, someone to talk to, someone to bounce ideas off, someone to ask questions to, a community of like minded good traders all at this trading the same strategy.
And that’s why we come into things that The Forex Trading Coach, our community, our forum site, our daily trades that we post each day, our live weekly webinars, the communication between clients and ourselves and everybody helping each other out with the same trading strategy is vital. I quite often will see someone post a trade on my forum site.
Now I wasn’t even looking at the time. That’s a great trade. Thank you very much. Last week, for example, I had a plus 3.6% gain for the week and I only risked a quarter of 1% on each one of those trades because they get copied through the prop firms. So having that community that supports like minded people trading the same strategy is massively important and you cannot underestimate that importance out there.
So if you’d like to find out more about how we operate, how we trade, how we teach, how we can help you. We doing this as I said, nearly 16 years of teaching, I personally been trading 20 years. And look, it just works. Nothing’s changed in that time. In terms of the strategy. That’s a really important point.
That comes back to number one. I’ve got such confidence in my trading strategy that I just know what to look for, and that’s what our clients do as well. We’ve got clients doing very well, making great income, passive income, prop firm income, passing challenges.
17 minutes Masterclass and Book a Call.
Have a look at my masterclass. I’ll put a link to that here. If you’d like to book a call to have a chat with one of us, please do that. Make sure the right fit for each other. Before you look at any commitment on board, we want the right people on board with us that are going to be successful. You know, thinkers, people that are going to put some effort in, people that are going to make this work because that’s how we operate, and that’s what we expect from our clients. In order for them to have the highest chance and probability of success. And that’s why we do so well.
Blueberry Markets as a Forex Broker.
And if you’re out there looking for a good broker, have a look at Blueberry Markets. They’re a fantastic bunch of people. They’re over in Australia, but they can take clients with pretty much anywhere in the world apart from a few countries, US (United States of America), of course, being one of them.
But most of the people, you can trade through Blueberry Markets. They’ve got a massive amount of markets on their MT5 platform. Have a look at them. I’ll put a link to them as well.
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