All beginning traders in the Forex market make almost identical mistakes. Beginners are mistaken in result of the inexperience. Losers – because simply cannot behave differently. In any case a basis here is one – the majority of traders has stereotyped thoughts, in full accordance with the psychology of behavior inherent in crowd.
If to reject charming illusions concerning own “I”, all of us are imperfect people, especially when business concerns decision-making on financial markets. Only the market is not mistaken.
Very many traders – irrespective of in what scale they trade, – enter into the market while already it is time to leave it. According to theory of Elliott, it often happens at the third or the fifth wave. But every time there is a chance for profit earning on the further growth, the probability of falling of the market during these moments is already very high. The participant of the market enjoys the profitableness of the bargain for some time, but then he sees, that decrease in quotations brings him loss.
If it happens on an outcome of the third ascending wave, the trader worries very much because the price starts to move under laws of the fourth wave. Trader doesn’t know what he should expect from the market. The market is unpredictable! It bothers the trader, and he leaves the market at a loss or with a small profit, and then suddenly with amazement he sees, how the price goes to new tops, and his bargain could give quite good profit.
If the trading item forms in the termination of the fifth ascending wave the matter is even worse: the price tendency can be changed at any moment and in the foreseeable future will not return to an entry point. Perhaps, this variant is the worst of all existing: though sobering up comes fast, but you loose too much. Nevertheless, under this scenario events develop with all losers and huge number of traders-beginners.
Why is it so? Here are some explanations. The first consists in stable thinking that movement of the market should be together with volume. Here is the certain element of truth in it. Really, if the rise in prices is not supported by volume, it means that new traders don’t want to enter into the market. Therefore trade occurs basically between present on the market during this moment participants and some number of again arriving and decreasing players. But it is natural that if someone purchases, someone should sell also.
Don’t make such mistakes and try to think properly before you do something. If you want to have success in the Forex market, you should work very hard and always to learn new things and methods of trading.
It is vital to gather as much information about currency exchange market as possible. Because this info will help you not to lose much money on Forex trading or Forex investment.
Surely not a single piece of knowledge can be a 100% guarantee against losses, in particular on Forex, but sometimes just one Forex books can save you much money.