It is widely believed in the forex trading circles of the world that only 10 percent of the individuals who actually get into forex trading actually end up succeeding. This means that a whopping 90 percent of the people who enter the foreign exchange South Africa market fail to achieve their dreams and goals.Naturally, the reason why such a large percentage of entrants fail is that they make some fairly basic but still professionally fatal mistakes in the market. These numbers also show that the early stages of a trader’s life on the foreign exchange are the most crucial because this is his learning stage.
Therefore, if you are looking to enter the foreign exchange market in South Africa as well, then you need to be very careful during the learning phase of your career as well. One of the ways to avoid making the same mistakes that the aforementioned 90 percent make is to simply be more aware of these mistakes.
Consider the five most common mistakes made by novice traders on the foreign exchange market.
Lack of Strategy
The foreign exchange market is an extremely unpredictable place. The foreign exchange rates are always fluctuating and the only way through which a trader can add some semblance of order is by putting a structure to his own trading methods.
There is no forex trader on the South African forex market who has stopped using a solid strategy and still been successful in the market. Therefore, the most fundamental mistake that a trader can make on the foreign exchange South Africa market is not having a solid trading strategy.
Ignoring the Devised Strategy
Having a trading strategy and ignoring it is as good as not having a strategy at all. Still, many novices in the foreign exchange make this mistake of having a strategy and neglecting it when it comes to making crucial decisions.
Most individuals enter the foreign exchange South Africa market with dreams of big wins like the kind that George Soros managed. What these individuals do not realise is that these are unrealistic expectations that can put undue pressure on them to do well in the market.
While big wins are not impossible, aiming for them means that you are constantly putting your account balance at risk. It is much better to be steady than to burn out quickly.
Impatience is another problem that most novice traders are unable to cope with on the foreign exchange. Mistakes related to impatience would show up in the form of overtrading, forcing opportunities, and taking decisions that are not strongly rooted in logic.
Neglecting Money Management
Money management principles are supposed to be an intrinsic part of a trader’s strategy. If you do not use these principles then you would be exposing yourself to undue levels of risk in the foreign exchange South Africa market. Money management principles are easy to implement and only require a little discipline from the trader.
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