Not every individual who develops an interest in trading in the forex Australia market is going to succeed. This is not a judgement on the foreign exchange Australia market but instead on the traders who do not make it into the big time.
The reason for this is simply that there are countless traders currently active in the forex Australia market that not only rely on it for their regular income but have also become rich because of it. So, why is it that so many people fail to benefit from the foreign exchange? The answer is that they make mistakes. Here are some samples.
Too Many Currency Pairs
The general perception amongst the masses is that putting all eggs in a single basket is inviting trouble. This pushes many traders to focus on multiple currency pairs for their trades in the forex Australia market.
However, this divides their attention to a point where none of their positions are as well researched as they should be. In simple terms, if you are new to the FX market then you should only focus on one currency pair at one time.
Using High Leverage
Leverage can increase the extent of your profits but can also make your losses worse. Therefore, using high leverage is strictly inadvisable for any trader in the forex Australia market, whether experienced or new.
Not Using Stop Loss Orders
Stop loss orders exist for one reason alone and that is to help traders counter the inherent risks of the forex Australia market. They automatically cause a position to close if it goes too deep into loss. However, if the trader chooses to not use this position of closure on his trades then a single position’s reversal can cost him his whole account balance.
Tight Stop Loss Orders
Forex rates on the forex Australia market fluctuate wildly. Many times, they will go into a dive before rising again. Most analysis results would only show the rise and not the minor dip.
Unfortunately, if the trader puts a tight stop loss order on his position then the dip would cause his position to close and him to lose money. The worst is that the position then rises the way the trader had projected earlier.
Avoiding Being Stopped Out
Another very glaring mistake common amongst new traders in the forex Australia market is their penchant for moving their stop loss positions because they do not want the positions to close. What they do not realise, however, is that they are just increasing their losses because the position will be closed sooner or later.
Staying in Too Long
On the other end of the spectrum is keeping a winning position open for too long so as to squeeze in every last pip from the trend. However, as your education may have shown you, every trend is followed by a reversal of rates. If you stay in a winning position for too long in the forex Australia market then you are risking losing all the profits that you have gained.