Foreign exchange market enables everyone to make substantial profit. However, it implies much hard work. Becoming a successful trader requires taking well-thought decisions on the market. Once failed, beginners tend to put the blame on the market peculiarities, hindering earning money. It is not the case though. We are going to deal with some stories of traders who wasted their deposits away and the ways to avoid mistakes.

The story № 1.

I started my work on Forex with learning the related literature and then I opened a demo account to test my trading strategy. Little time has passed before I was able to successfully conduct my own strategy on the market.  This is when I opened a real account. My initial deposit was but USD 10. Having spent a month and half trading, I boosted it up to USD 50.  And so the day came when I decided to put at stake my whole deposit and clicked “Buy”. But the very moment I closed the deal I got a message that read “the price has changed, would you like to close the deal for the present price?”. This situation occurred to me more than once.  I decided to wait some time, though there was not much to expect. The price changed its direction and started to move downwards, destroying all the positive experience I gained, my self-esteem and the deposit.

Conclusion:

Any trader should keep in mind the following rules:

1.       Not to open a deal for the whole deposit and observe the money management rules;

2.       Not to forget to place stop orders.

3.       In order to start trading on real accounts, it is necessary to train trading on a demo account.

The story №2.

Having worked some little time on foreign currency market, I registered a demo account and began to gradually get to know forex processes. At first, my demo trading was rather successful and so I decided to start real trading. I registered a real trading account. My initial capital of USD 100 was not sufficient to cover losses, but I carried on. To cover the losses of one unprofitable deal, I opened another one. All the deals I made caused losses. The market appeared to me absolutely unpromising. I lost an awful lot of money and abandoned Forex once and forever.

Conclusion:

The main mistakes of the most beginning traders are emotional inexperience and covetousness. In order to succeed, a trader should not only follow certain risk management rules, but also learn to control emotions and avoid getting consumed by them while trading. It is important that a trader does not let avarice be responsible for trading decisions and is able to close deals in time to avoid losses.

The story № 3.

As most traders, I began my Forex experience with a demo account. I opened one for USD 5000. I started trading, everything was quite good and in a couple of weeks I decided to open a real trading account. I used to enter the market when I wanted, without following event dynamics and taking into account the schedule of trading sessions and releases of major economic news. What I did was turn on the computer, draw a trendline on a 1-hour graph and simply buy or sell currency according to it.

After this I turned off the computer and checked the result after some time. If the price moved along with my expectations, I got profit; if it did not, which happened in most cases, I suffered loss. Eventually, such trading ceased to be profitable at all. This is how my Forex trading ended.

Conclusion:

In order to trade on Forex one should possess theoretical knowledge of major market mechanisms. In this respect, before real trading you should spend enough time training on a demo account along with reading Forex literature, which will give you the basis and explain the peculiarities of forex trading. All decisions should be analyzed and weighted up. Only in this case your trading will be profitable.

Added by Yana Krupko,
InstaForex PR-manager