Online Forex Trading - 6 Common Errors That Will See You Lose

If you are looking at online forex trading, in this article you will find some common errors that will see you lose.

Many of these are accepted ways to make a profit and you will see many writers give convincing stories that they will help you make money, but they wont.

Make these errors and you will lose, so here they are:

1. You can day trade and make money

Yawn. How many times do you see day trading touted as a way to make money?

All the time.

Fact is it does not work and cannot work, as its based on logic that is simply not correct.

Any experienced trader knows that short term volatility is random, within daily and hourly time frames.

If you cant judge where volatility will go in short time frames you cant get an edge or the odds in your favour.

So, if volatility is random how you can get the odds in your favour and make money?

You cant!

Dont believe me? Then consider this:

There are millions of traders in the market each day trading trillions of dollars and the huge majority are not looking at daily ranges.

Try and find a day trader with a real time track record of profit ( let me know when you do) as most are selling systems and not dumb enough to trade themselves.

Good story, but a great way to lose your money period.

2. You can use moving averages as a timing indicator

Really? This is a real gem.

How can you time entry with a lagging indicator?

Think I will stick to momentum indicators.

3. Brokers can make you lose

This is a story put around mostly by day traders who want to justify why they get stopped out.

Brokers hunt stops!

No they dont consider this:

The only participant with the potential to move a market and pick off stops by themselves is a central bank and even they dont achieve this every time.

A broker trying to pick stops in a market that trades trillions of dollars a day is laughable.

Dont fall for this story.

4. Currency trading is risky

A statement of the obvious!

To a degree this is of course true, but so to is life.

Crossing the road is risky, so do is driving a car, but there are two aspects to risk.

The market you are trading + your approach = Risk

You can make online forex trading as risky as you want, or you can control it by prudent money management and a sound trading method.

5. Paper trading and dummy accounts are useful

For what?

Big deal you can trade without money and place orders ( which is easy) but this is absolutley no use when you come to trade with real money.

It then becomes an emotional experience and the heat is on unlike in paper trading and you will feel very different.

Don't think that because you can paper trade successfully you will make money in the market.

5. You need to work at trading and gain experience

Why? Once you have a method thats it.

You just need to place your orders each day and thats it.

Experience does not make you a better trader.

Trading is not something that has to be constantly worked at once you have your method your all set.

There are many more misconceptions about being a forex trader but the above ones are very common and if you believe them you will lose.

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Jim Rogers: Will the US Dollar Disappear from the World's Stage

We talked, in a taped telephone interview at his home in Singapore, with Billionaire Jim Rogers, legendary commodities trader, who picked the bottom of the commodities bull market in 1999. With George Soros, Jim Rogers co-founded the Quantum Fund in 1970.

Over the next decade, Quantum Fund grew by more than 3,300 percent. Rogers retired, later a guest professor of finance at the Columbia University Graduate School of Business, and still later circumnavigating the globe to firsthand discover new investment opportunities. He is widely and often quoted in the media about his views on the commodities market. Bestselling author, investment biker, adventure capitalist and widely followed, Jim Rogers talks about what he's now investing in. StockInterview: Is the United States heading toward the same demise as previous colonialists: England, France, Holland, Germany and even previous world powers, such as Spain and Portugal?

Jim Rogers: If all powers, which have risen, have eventually peaked, plateaued, and then declined, we of the U.S. certainly have things going on which would indicate that we are. I dont think anybody would dispute that we are a mature economy and a mature society. Whether were still growing or not is another question. I see many factors where were overextended financially, overextended geo-politically, and overextended militarily. I would suspect the U.S. is in a plateau phase, and perhaps has even gone over the line and is in a decline, certainly on a relative basis.

StockInterview: Who, then, would replace the U.S.? Russia, India, Japan or China?

Jim Rogers: Not Russia. No, Russia is a disaster spiraling downward into a catastrophe. I see little hope for India replacing anybody. India is more likely to break up into a few countries in the next few decades than it is to become the world power. Japan has serious demographic problems. Japans population is in decline for the first time in recorded history. Unless something happens demographically in Japan, Japan is going to have huge problems in the next few decades. Theyve got gigantic internal debt, which somebodys got to pay off. With a declining population and internal debts rising, I think theyve got serious problems. The only one I can see on the horizon is China.

StockInterview: What, then, will become of the U.S. dollar?

Jim Rogers: The same thing that happened to sterling; the same thing that happened with the guilder. You know, the guilder used to be a great international currency. The peso used to be a great international currency. You dont see people using guilders anymore to settle their international debts or finance their wars. They decline and sort of disappear from the world stage. I would certainly get out of the U.S. dollar. Its already losing its status as the worlds reserve currency, as the worlds medium of exchange. We in the U.S. owe the rest of the world at least eight trillion dollars -- thats trillion with a T and its increasing at the rate of one trillion U.S. dollars every 15 months. There are serious problems in the U.S. with the U.S. dollar. I wouldnt own U.S. dollars if I were you.

COPYRIGHT 2007 by StockInterview, Inc. ALL RIGHTS RESERVED.

James Finch contributes to StockInterview.com and other publications. StockInterviews Investing in the Great Uranium Bull Market has become the most popular book ever published for uranium mining stock investors. Visit http://www.stockinterview.com