New forex traders tend to feel invincible when they first begin trading. But with the first few losses, traders quickly learn that they’re not invincible (nor is their bank account), and that the most common mistakes of forex trading could have been avoided if they had just relied a bit more on due diligence, and relied a little less on pure luck.
Here are the top two common mistakes of forex trading:
- Believing that forex trading is simple, and that anyone can do it. Yes, in theory, it is simple, and yes, in theory, anyone can do it. But it is in practice that the difficulty arises. Without learning as much as you can about not just forex trading but about forex technical analysis and fundamental analysis, you stand to lose a lot more money than you’ll ever make. Forewarned is forearmed, so get yourself the best forex trading education you can, take as much time as you need to learn it and learn it well, and then proceed cautiously. Anyone can trade forex, but not everyone does it right.
- Believing that you can get a good forex trading education overnight. There is so much to learn and understand about forex trading that a single night won’t give you enough of an edge to truly make a difference. Forex trading isn’t simply pulling the right pair of forex currencies out of thin air and choosing a buy or a sell price – it’s knowing which pair to choose, which direction they might be moving in, what events will play a part in their trade, etc. Understanding forex fundamentals isn’t a time consuming process, but one night’s worth of education won’t give you all that you need to succeed. If you’re interested, say in trading Euro and U.S. Dollars, learn what the pair are doing now, why they’re doing it, what they might be doing tomorrow or the next day based on what analysts and economists and other traders think. Understand that there is a vast difference between a guess and an educated guess.
Once you’ve learned how to avoid the two most common mistakes of forex trading you can be on your way to a successful career. If you haven’t been able to avoid them, that’s okay, too. The good thing about forex trading is that it doesn’t hold a grudge. So long as you know where you went wrong, then you’ve learned your lesson well.
Written by Sara Patterson – fundamental analyst for DailyForex.com
Some might take the declining employment numbers as good news, but when you look at the actual cause of the April 2012 unemployment rate drop from 8.2% to 8.1% you then see the numbers have been quite fudged. Heritage.com reports that the labor force participation rate is at a 30 year low. Despite the 115,000 jobs added in April (lower than the estimate of 165,000), 342,000 left the job market and will no longer be counted as even looking for employment.
So, these people are not unemployed, they just aren’t interested in employment due to retirement, sickness or most likely, long term unemployment for more than 99 weeks. After you stop collecting unemployment from the government, and have still not found a job, you will drop off unemployment rolls and be in some kind of suspended animation I guess. Who knows what the current political regime thinks you are?
While many economists expected the labor force participation rate to go up, the troubling sign is that it is still dropping since the recession officially began in December of 2007. The rate at that time was 66% and has since dropped to 63.6% with the latest statistics from April 2012.
Below is a chart that shows the decline back from January of 2001. These are troubling statistics no doubt:
Source and chart from Heritage.org
Now that Nicolas Sarkozy has lost the presidency to a socialist in France and Greek voters have decided that they really don’t want their country to get out of debt, what does that mean for the price of gold? New French President Francois Hollande wants to lower the retirement age from 62 to 60 thus making the country even less productive as a whole and he also wants to tax millionaires at 75% of their income. Not a big deal here because French voters put him in office based on these profoundly unsound economic thievery principles.
While this is temporarily strengthening the US dollar while it is weakening the Euro, the immediate effect is to lower the price of gold. However, once new President Hollande figures out he can’t possibly pay the bills with such early retirement and tax policy foolishness, economic stagnation will begin in France (worse than it already is) and spread around Europe like cancer. And with Greek voters rejecting any austerity measures, Eurozone collapse is soon to follow thus making for that possible day of reckoning that will put the price of gold through the roof.
The next few short months in Greece should be quite interesting as all the hard fought austerity measures and agreements hashed out to try and bring some stability to the sinking ship that is the Greek economy gets scrapped and everybody goes back to the drawing board. That is surely something German Chancellor Angela Merkel as well as German voters won’t be happy about. There probably won’t be much tolerance for shenanigans from Greek riots and then asking for bailout money from the rest of Europe once again.
The day of reckoning is much closer.