How to prevent losses in forex trading

Forex trading has establishing itself as one of the most lucrative means of making money. Unless you are an experienced and knowledgeable trader you are likely to make losses at the beginning. Listed below are some of the common reasons why beginners make losses.

Not having a trading system

There are many trading systems available, some of which are free. You need to select one depending on the capital you are going to invest and your goals. Do your research on the available systems before selecting one to suit your needs.

Not knowing when to exit

To make a profit you need to enter into the trade at the right time and most importantly exit at the right time. Not knowing this is one of the main reasons for making losses.

Risking too much

With a lot of hard work and study, an experienced trader will know how and when to take calculated risks. You need to take risks to make money, but many novice traders risk too much with the expectation to make quick money and end up losing.

Trading too many currency pairs

Until you master the art of trading stick with a few pairs you are familiar with.