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Title: 10 Ways to Avoid Losing Money in Forex


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10 Ways to Avoid Losing Money in Forex
  • Here are 10 ways traders can avoid losing money
    in the competitive forex market. 

Theforexsecret.com
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1. Do Your Homework
  • Just because forex is easy to get into doesnt
    mean due diligence should be avoided. Homework is
    an ongoing effort as traders need to be prepared
    to adapt to changing market conditions,
    regulations, and world events. Part of this
    research process involves developing a trading
    plana systematic method for screening and
    evaluating investments, determining the amount of
    risk that is or should be taken, and formulating
    short- and long-term investment objectives.

Theforexsecret.com
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2. Find a Reputable Broker 
  • The forex industry has much less oversight than
    other markets, so it is possible to end up doing
    business with a less-than-reputable forex broker.
    Traders should also research each brokers
    account offerings, including leverage amounts,
    commissions and spreads, initial deposits, and
    account funding and withdrawal policies. A
    helpful customer service representative should
    have all this information and be able to answer
    any questions regarding the firms services and
    policies.

Theforexsecret.com
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3. Use a Practice Account
  • Nearly all trading platforms come with a practice
    account, sometimes called a simulated account or
    demo account. These accounts allow traders to
    place hypothetical trades without a funded
    account. Perhaps the most important benefit of a
    practice account is that it allows a trader to
    become adept at order-entry techniques.

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4. Keep Charts Clean
  • Once a forex trader opens an account, it may be
    tempting to take advantage of all the technical
    analysis tools offered by the trading platform.
    While many of these indicators are well-suited to
    the forex markets, it is important to remember to
    keep analysis techniques to a minimum in order
    for them to be effective. Using multiples of the
    same types of indicators, such as
    two volatility indicators or two oscillators, for
    example, can become redundant and can even give
    opposing signals. This should be avoided.

Theforexsecret.com
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5. PROTECT YOUR TRADING ACCOUNT
  • While there is much focus on making money
    in forex trading, it is important to learn how to
    avoid losing money. Proper money management
    techniques are an integral part of successful
    trading. Many veteran traders would agree that
    one can enter a position at any price and still
    make moneyits how one gets out of the trade
    that matters. Part of this is knowing when to
    accept your losses and move on. Always using a
    protective stop lossa strategy designed to
    protect existing gains or thwart further losses
    by means of a stop-loss order or limit orderis
    an effective way to make sure that losses remain
    reasonable.

Theforexsecret.com
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6. START SMALL WHEN GOING LIVE
  • Once a trader has done their homework, spent time
    with a practice account, and has a trading plan
    in place, it may be time to go livethat is,
    start trading with real money at stake. No amount
    of practice trading can exactly simulate real
    trading. As such, it is vital to start small when
    going live. Factors like emotions
    and slippage (the difference between the expected
    price of a trade and the price at which the trade
    is actually executed) cannot be fully understood
    and accounted for until trading live.
    Additionally, a trading plan that performed like
    a champ in back testing results or practice
    trading could, in reality, fail miserably when
    applied to a live market.

Theforexsecret.com
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6. USE RESONABLE LEVERAGE
  • Forex trading is unique in the amount
    of leverage that is afforded to its participants.
    One of the reasons forex is so attractive is that
    traders have the opportunity to make potentially
    large profits with a very small
    investmentsometimes as little as 50. Properly
    used, leverage does provide the potential for
    growth. But leverage can just as easily amplify
    losses.

Theforexsecret.com
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7. KEEP GOOD RECORDS
  • A trading journal is an effective way to learn
    from both losses and successes in forex trading.
    Keeping a record of trading activity containing
    dates, instruments, profits, losses, and, perhaps
    most important, the traders own performance and
    emotions can be incredibly beneficial to growing
    as a successful trader. When periodically
    reviewed, a trading journal provides important
    feedback that makes learning possible. Einstein
    once said that insanity is doing the same thing
    over and over and expecting different results.
    Without a trading journal and good record
    keeping, traders are likely to continue making
    the same mistakes, minimizing their chances of
    becoming profitable and successful traders.

Theforexsecret.com
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8. KNOW TAX IMPACT TREATMENT
  • It is important to understand the tax
    implications and treatment of forex
    trading activity in order to be prepared at tax
    time. Consulting with a qualified accountant or
    tax specialist can help avoid any surprises and
    can help individuals take advantage of various
    tax laws, such as marked-to-market accounting
    (recording the value of an asset to reflect its
    current market levels). Since tax laws change
    regularly, it is prudent to develop a
    relationship with a trusted and reliable
    professional who can guide and manage all
    tax-related matters.

Theforexsecret.com
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10. Summery
  • The worldwide forex market is attractive to many
    traders because of its low account requirements,
    round-the-clock trading and access to high
    amounts of leverage. When approached as a
    business, forex trading can be profitable and
    rewarding. 

Theforexsecret.com
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Thank You
  • Website https//theforexsecret.com/
  • Email
  • info_at_TheForexSecret.com
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