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Avoid Losing All Your Money in the Forex |
| | | It's heart-breaking, but we get an email like this at least once a week: "I tried trading forex because a friend recommended it, but I quickly lost all my money. Now I am trying to learn to trade smartly." 
The worst of these emails tell us the money the lost is their "entire savings" or "retirement money."
Sadly, it's very easy to lose all your money trading forex if you aren't prepared and haven't learn solid trading principles.
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Here are the most common mistakes, and information to help you avoid them:
Inconsistent Position Sizing
The amount you put in each trade, in actual dollars and as a percentage of your account value, can make a major difference in trade success. Erratic behavior in this area can kill your account fast.
Read Position Sizing in Forex to learn more.
Misuse of margin and leverage
Not only is margin and leverage in the forex mis-used, it's widely mis-understood as well. It's a hard lesson to learn if you get on the wrong side of a margin and leverage error.
Read Margin and Leverage in Forex to learn more.
Trading too much in the short-term
While all the information out there on the forex touts its short term "get rich quick" properties, the sad truth is that most traders who trade short-term lose all their money. Learn to be moderate in your trading and timeframes.
Read Short Term vs. Long Term Trading to learn more.
(For more analysis, charts and data, click on the pair flags below)
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