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In this video:

05:39 – Blueberry Markets

06:20 – Contact me for future video topics

I’m going to cover the five biggest mistakes that I see most traders out there making and help you so that you can stop making those same mistakes and turn yourself into a profitable forex trader. Let’s talk about that and more right now.

Stop making these mistakes

Hey traders, it’s Andrew Mitchem here at The Forex Trading Coach with video and podcast number 468. I want to give you five really important points today and they are the five points that I see that most traders out there are making with the aim to help you not make those mistakes and therefore to improve your trading.

#1 Most traders lack a trading strategy

So, first thing I see, and these are really in no particular order is people don’t seem to have a strategy. They don’t know what it is that they’re looking for and therefore they’re just kind of trading on a bit of a hunch. They have heard something on the news, or they’re just randomly taking buys here and sells there or this indicator might cross over that one, but they don’t really know what they’re doing.

So I think a lack of a clear strategy is one of the biggest failings of most people out there. And to me, a good strategy means that you have full confidence in it. You know exactly what you’re doing when you’re doing it. And it will work equally as well across all different timeframe charts, all different markets, all different times of years, et cetera. So you need a good solid trading strategy. That’s the first thing that most people are failing on.

#2 Lack of understanding about correct money management

The second thing is that most people really do not have any idea when it comes to correct money management and people will just place a trade. I think MT4 or MT5 is defaulted to one standard lot. So they just press buy or sell one lot or 0.1 lots or 0.01 lots. They don’t really know about money management and how to correctly position your trade size. And the reason that people don’t know that is they don’t know where they’re putting their stop loss or anything like that in order to calculate that people don’t know that different currency pairs make or pay different amounts per pip, depending on what your account denomination is so whether it’s in US dollars or euros or New Zealand dollars or Canadian dollars, things like that. And if you’re trading the Euro-US with a US bank account, as opposed to the Euro-US with a New Zealand bank account, you’ll get paid different amounts per pip. So people don’t understand that and they just put random lot sizes on and not calculate that properly. The issue therefore is they don’t have controlled risk on their trades.

#3 You need high reward:risk trades

The third thing leading on from that is they don’t understand about high reward to risk trades. And therefore you find a lot of people will say, “Hey, I’ve got a 90% winning system, but I’m still losing money,” and that becomes the problem. People take lots of small little gains and then have one big loss and it wipes out all those small gains plus lots more. And then you have another loss and you’re massively going backwards. Then you might have a few small gains just to call yourself back and then another big loss.

So not understanding good reward to risk is crucial and also leading on from that. Most people don’t know how to get high reward to risk trades. They just don’t know what they need to do in order to do that. They might have just a crazy little stop loss possibly, but of course it’s going to get stopped out all the time. So understanding the need and also how to get high reward to risk trades is another big issue.

#4 Knowing when to trade

A lot of people don’t understand when to look for a trade and even what timeframe to look at. So people tend to trade when it suits them or when they put the kids to bed or they finish dinner or something like that. Or maybe before they go to work in the morning or on the lunch break, things like that, depending on where you live in the world and when the market’s active or not. People just don’t seem to know when to trade. That can lead to all sorts of confusion and it could lead to one timeframe potentially telling you to buy, another timeframe having you to sell, you’re trading simply because you’re ready not because the market’s ready. And it definitely leads to overtrading as well, where people just taking far too many trades simply because they happen to be at their computer at that time.

#5 What is the price?

And then lastly, people don’t look at the price. Why would you be a currency trader all having these currency pairs, having different values if you don’t look at the right-hand side of the chart and actually look at the price? It’s so simple because it’s there on every chart, but I bet you, most people don’t look at it. They don’t look at when the price last banks at that level and they don’t look at what the price level is. Has it reached one to one parity? All sorts of different things. Has it reached a ran number like 0.70 for the Aussie dollar, let’s say? The New Zealand dollar against the US 0.60 or something like that? People just do not look at the actual price.

Now, look, I’ve given you five points as a whole ahead more I could tell you about with candle patterns and everything else and ran numbers and all these other things and trend lines, et cetera. But those five points are five very big issues that most people make. And if you just solve those or some of those to start with, you’re going to give yourself a big head start.

Blueberry Markets

Now, when it comes to deciding where to trade through, one of the brokers I can highly recommend is Blueberry Markets. They’re over in Australia. Pretty much anybody anywhere can open an account with them except a few countries and especially if you’re in the States, sorry, you cannot open with Blueberry Markets. If you are in the states, have a look at OANDA, but for everybody else, if you want to trade with a good broker with great people onboard, great prices and spreads, lots of instruments, especially if you go to their new MT5 platform, I can highly recommend Blueberry Markets. I will put a link to them on this post and podcast.

Contact me for future video topics

And as always, if you have any questions, any topics you’d like me to discuss in future videos and podcasts, just like this one, just drop me line [email protected] and I will personally reply to you and do my best to help out on future videos and give you lots of trading tips and information.

So I hope that helps take on board those five points, have a good look through our website of all the things that we offer. If you’ve not yet got our calculator, if you’re not yet been on one of our free webinars, just do it because that information’s there for you to use and to take advantage of and to help you with the trading.

So I’ll see you this time next week. This is Andrew Mitchem here at The Forex Trading Coach. Bye for now.