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Top 3 Forex traders' mistakes - Forex Trading Strategy Q&A

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What are the top 3 mistakes that every retail Forex trader makes? The first mistake is risk management, risking too much, blowing up your account etc that might seem obvious but when I say risk management I’m not specifically referring to that aspect of risk management. What I’m referring to in this video when I say risk management is knowledge; part of risk management is understanding the markets, why they are behaving in the way that they are and basically knowing what you’re doing. If for example you go to work and do your job and you know what it is that you’re doing, chances are you are going to do your job properly, if however you simply elected someone with no prior knowledge or experience to do your job for the day, it’s very likely that they are going to make mistakes, the jobs not going to get done properly and there will be serious repercussions when everything goes wrong. Trading is the same if you come into trading and simply buy a book or trade a strategy that you bought from the internet, you don’t really know what you doing and therefore you will struggle to make profits, so having the correct knowledge is a form of risk management because the more experience you have and know how on how to implement the correct process of trading the better you will become and the less risky trading will be. The second mistake is switching this means going from technical strategy to technical strategy, so you buy a strategy off the internet and everything looks great, the fact of the matter though is that when you try and implement this strategy it is only really any good for a day or two. Due to this you ditch that strategy and you find a new one, the problem with this is that each time you are focused on what the strategy is telling you to do as appose to focusing on the right things which are learning how to trade and what factors drive currency prices. You will find yourself busy trying to find a system to do the work for you, which is where I refer back to mistake one, you have bad risk management because you haven’t sought that knowledge on the markets and what factors drive currency prices. The third mistake is an over reliance on technical analysis, most retail traders just stare at charts they will get their strategy and find themselves just staring at a chart waiting to for a signal/indicator to prompt a buy or a sell. If you have been guilty of this and have just looking at a price chart and nothing else you will struggle to make consistent profits trading the Forex markets.
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Text Comments (4)
Chris Grantham (1 year ago)
So traders can't make money only relying on Technicals? That means I ran into a lot of liars and marketers lol They always told me that news follows technicals.
Well technicals are still important especially for risk management and psychology, but the fundamentals and sentiment are the reason for entering a trade. :)
aboctok (1 year ago)
Good stuff, Jarratt. Noticed that bit of harmless switching in your recap though ;)
In this video I’m going to be discussing the 3 top mistakes that every retail trader makes, so if you’re a retail trade and more importantly if you’re struggling to make consistent profits I can guarantee you are making one of these mistakes. The first mistake is risk management, risking too much, blowing up your account etc that might seem obvious but when I say risk management I’m not specifically referring to that aspect of risk management.  What I’m referring to in this video when I say risk management is knowledge; part of risk management is understanding the markets, why they are behaving in the way that they are and basically knowing what you’re doing.  If for example you go to work and do your job and you know what it is that you’re doing, chances are you are going to do your job properly, if however you simply elected someone with no prior knowledge or experience to do your job for the day, it’s very likely that they are going to make mistakes, the jobs not going to get done properly and there will be serious repercussions when everything goes wrong. Trading is the same if you come into trading and simply buy a book or trade a strategy that you bought from the internet, you don’t really know what you doing and therefore you will struggle to make profits, so having the correct knowledge is a form of risk management because the more experience you have and know how on how to implement the correct process of trading the better you will become and the less risky trading will be. The second mistake is switching this means going from technical strategy to technical strategy, so you buy a strategy off the internet and everything looks great, the fact of the matter though is that when you try and implement this strategy it is only really any good for a day or two.  Due to this you ditch that strategy and you find a new one, the problem with this is that each time you are focused on what the strategy is telling you to do as appose to focusing on the right things which are learning how to trade and what factors drive currency prices.  You will find yourself busy trying to find a system to do the work for you, which is where I refer back to mistake one, you have bad risk management because you haven’t sought that knowledge on the markets and what factors drive currency prices. The third mistake is an over reliance on technical analysis, most retail traders just stare at charts they will get their strategy and find themselves just staring at a chart waiting to for a signal/indicator to prompt a buy or a sell.  If you have been guilty of this and have just looking at a price chart and nothing else you will struggle to make consistent profits trading the Forex markets. 

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