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5 Big Forex Mistakes Small Investors Make

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by , 06-27-2016 at 10:31 AM (1531 Views)
      
   
5 Big Forex Mistakes Small Investors Make

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"Some $5 trillion daily move in foreign currency trading (aka forex), and that is a number that dwarfs the amount of money traded on stocks (said by some experts to be under $100 billion daily counting all exchanges). That is a huge pot of dough and here's the reality: small investors are very much welcome and rewards can be huge."

"That's because most trades involve leverage - a lot of it. A trader may control $10,000 worth of assets with as little as $100 on the table, or $100,000 of assets with $1,000 in the game. Fairly commonly are 100 to 1 leverage plays, and that means small money can produce big payoffs. It also means there's a potential for wipe-out, absolute devastation."

  1. Over-using leverage. "Brokers will give you much more leverage than you should be using."
  2. Buying and selling on news.
  3. Thinking time is on your side. "Most aspiring traders bet on single positions as if they knew the time to enter and exit the market is right. Yet, oftentimes their timing is wrong."
  4. Ignoring currencies with big spreads.
  5. Thinking like a retail investor. Teach yourself to think like a banker.


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