Avoiding Pitfalls in Forex Trade

Fiorenzo Fontana, a trader and analyst at UBS wrote a very interesting article containing a lot of tips on how to avoid typical pitfalls and start making more money in forex trading.

All of his tips are very interesting and useful. Some of the less known are as follows:

• Trade pairs, not currencies
• Don't place very tight orders
• Use reasonable stop losses
• Increase your leverage in line with your experience and success
• Don't trade during off peak hours
• The best time to trade is when news is released
• If you place a trade and it's not working out for you, get out
• Trade in the direction the price is going
• Learn the business before you trade - possibly the most important tip!

In the second part of the article, Fiorenzo gives a number of interesting tips relating to trader's behavior and psychology. Again, some of the less known are:

• Focus on your current position(s) and place reasonable stop losses at the time you do the trade
• Focus on one cross at a time
• Don't trust demos - demo trading often causes new traders to learn bad habits. Once you know how your broker's system works, start trading small amounts and only take the risk you can afford to win or lose (new traders - remember that!)
• Stick to your strategy and invest profits on the next trade that matches your long-term goals
• Don't trade if you are bored, unsure or reacting on a whim
• Read forums, blogs and chats around the net to get an unbiased opinion before you choose your broker

Aren't those tips good? Not too often such good pieces of advice are being given for free... You can read here all tips by Firenzo Fontana on how to avoid the pitfalls and start making more money in your forex trading.