{"id":88798,"date":"2016-05-04T10:33:44","date_gmt":"2016-05-04T14:33:44","guid":{"rendered":"http:\/\/countingpips.com\/?p=88798"},"modified":"2016-04-27T10:34:23","modified_gmt":"2016-04-27T14:34:23","slug":"top-5-trading-lies-and-how-to-avoid-them","status":"publish","type":"post","link":"https:\/\/www.investmacro.com\/forex\/2016\/05\/top-5-trading-lies-and-how-to-avoid-them\/","title":{"rendered":"Top 5 trading lies and how to avoid them"},"content":{"rendered":"
May 4, 2016<\/div>
\r\n<\/div><\/div>

By Admiral Markets<\/b><\/p>\n

\"shutterstockedit.jpg\"<\/p>\n

Dear Traders,<\/p>\n

How many times you have heard Forex mentors, traders and marketers convincing someone to start trading – even when the person has no clue about trading?<\/p>\n

So let’s assume that you are an ordinary person and a salesperson came to you offering trading with their respected brokers.<\/p>\n

There are many types of salespeople.<\/p>\n

Some sell ideas, some cars, others lies.<\/p>

\r\n
\r\n

Free Reports:<\/p><\/div>\r\n

\r\n

<\/a>\r\n\t Get Our Free Metatrader 4 Indicators<\/u><\/b><\/a> - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter<\/p>

\r\n
\r\n
\r\n

<\/a>\r\n\t Get our Weekly Commitment of Traders Reports<\/u><\/b><\/a> - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.<\/p>

\r\n<\/div>\r\n

\r\n
<\/div>\n

Yes, you heard me. Lies.<\/p>\n

There are two primary ways to lie – to conceal and to falsify.<\/p>\n

In concealing – the person withholds some information, without saying anything untrue.<\/p>\n

When falsifying, the person withholds true information and presents false information as if it were true.<\/p>\n

In this article I will highlight several common lies that are prevalent in the Forex trading industry.<\/p>\n

You can make 20% profit every month<\/h2>\n

Yeah right.<\/p>\n

This is one of the biggest trading-related lies I have encountered so far.<\/p>\n

I’ve heard several times about brokers sending their agent (aka salesperson) to convince people who don’t have a clue about trading, that they can make this return.<\/p>\n

Please don’t fall for that.<\/p>\n

There is no success in trading without proper time investment.<\/p>\n

You need numerous hours of screen time to become an expert.<\/p>\n

There is a long and complex learning curve – primarily to:<\/p>\n

…understand what trading techniques suit each person\u2026<\/p>\n

…then learn to use them consistently\u2026<\/p>\n

…and repeat..<\/p>\n

When you next encounter a sales person, ask if he\/she has ever lost 50% of their account, where large capital is lost?<\/p>\n

And more importantly, have they recovered it?<\/p>\n

Unless you have experience of some serious losses, you won’t appreciate what it takes to be successful and consistently profitable.<\/p>\n

For example, without risk control<\/a> you’re going to end up with zero.<\/p>\n

Being positive and confident alone will not cut it.<\/p>\n

Remember, overly confident people are easy pickings for any dishonest brokers.<\/p>\n

Forex is not a casino<\/h2>\n

Forex is not<\/em> like a casino or entirely random.<\/p>\n

Most gamblers don’t have a game plan or strategy and for this reason, they don’t tend to win consistently.<\/p>\n

In essence, they just pay the house to play.<\/p>\n

They don’t stack the odds in their favor.<\/p>\n

Trading needs to be looked at as a business – not a gambling opportunity.<\/p>\n

The factor determining whether or not you are approaching FX trading as gambling or as a business, is whether or not you have the edge.<\/p>\n

A casino automatically has the edge because they make the rules of the game and stack them in their favour.<\/p>\n

Forex trading is different because there are no defined rules (other than don’t get a margin call), so everyone can approach the activity in their own way.<\/p>\n

However, by using a good system\/strategy and correct principles of money\/risk management – you can stack the odds to your favor and gain the edge.<\/p>\n

And if you have logged enough screen time, your odds can spike to 70\/30 or even 80\/20 in favor of winning.<\/p>\n

\"myfxbook.jpg\"<\/p>\n

Forex trading requires large starting funds<\/h2>\n

Not true.<\/p>\n

In this article<\/a> I show how you can successfully build up your small account using a trusted broker<\/a> and following your own plan.<\/p>\n

This example account has already increased five times its initial investment, from a small deposit.<\/p>\n

It’s proof that you don’t need huge amounts of money to successfully trade.<\/p>\n

\"Live_Account-AMGeneric<\/p>\n

Full time and professional traders never lose<\/h2>\n

Nonsense.<\/p>\n

Even professional traders get into trouble when they start letting their emotions dictate their trades.<\/p>\n

Believe me – trading with your heart and not your head, can happen to the best of us.<\/p>\n

The difference between novice and pro Forex traders, is that pro traders know when to cut their losses.<\/p>\n

Whenever a pro trader sees a loss coming they:<\/p>\n

…cut losses by getting out as quickly as possible via\u2026<\/p>\n

…exiting manually, placing a pre-determined Stop Loss or placing a dead stop that goes with the maximum risk threshold per plan.<\/p>\n

Focus on higher time frames if you want to make money<\/h2>\n

\"15mAJedit.jpg\"<\/p>\n

Again, not true.<\/p>\n

One of my best friends is a professional equity trader and he makes money by trading a 1 to 5 minute timeframe.<\/p>\n

Equities<\/a> are different to the Forex market.<\/p>\n

Sometimes 20 pips EUR\/USD can equate to 100 pips on the DAX, which is more than enough to make your day.<\/p>\n

Using multiple time frame for analysis and trading, should help solve any problem you may currently have with time frames specifically.<\/p>\n

Some traders simply can’t afford high drawdowns and huge stops by solely taking signals on H4 and daily time frames.<\/p>\n

Entries on H4\/D are usually late ones, as the move started long ago.<\/p>\n