3 common MISTAKES Forex traders make! And how to avoid them?!

3 common MISTAKES Forex traders make! And how to avoid them?!

Hi guys! It's Andrew Lockwood here again. Now, what I found over the years is that there's a consistency in the reasons why many struggle to make it as a trader. And I'm not really talking about the common mistake is a common reason that we've all heard about. About the excessive use of leverage, not using stops or indeed not having a trading plan. But I want to talk to you today more specifically about the actual buying and selling. Way on a chart, you should be buying where you should be selling. We want to show you where to put the high-poverty trades only take those trades that are offer the best chance of success.

And how to avoid the ones that are going to give you higher risk as well. Now this video is brought to you by our partner Broker IC Markets. Trade with IT markets and get access to super tight spreads. Fast and Easy Deposits or Withdrawals. 24/7 helpful Customer Support. Now if you open an account below using the link you also can take advantage of our Specially arranged Commission Structure. Just $per lot traded. Right! Now, let's get to the screens and let's look at these high probability areas of a chart where you should be placing your orders. And also look for the areas that you should be avoiding and staying away. Come on! Let's join me now on the charts. Now, I'm sure you've heard that expression in the past that says "Trading is simple, but just not that easy". Well, I don't think there's a true statement out there that can reflect the trading business in a more accurate way. Which is why I often wonder why many aspiring traders that are coming into the market for the first time make life so difficult for themselves? Putting the odds against them on everything that they do? Now we've all read the books.

You know we've seen the YouTube videos. We all know about the main reasons why traders fail. The excessive use of leverage. Taking on too much risk. Not using a stop loss and not sometimes even having a trading plan. So I'm gonna assume that you've at least got that inside your head. And today we're gonna talk about the three biggest actual trading reasons why many traders fail when it comes to actually reading a chart. And the first reason which I think is linked to the other three is that most traders don't look at the bigger picture. A lot of traders will get fixated on a particular time frame. Be it the one hour, the four hour, the daily weekly or whatever it is. But they're unaware of what's going on in the bigger picture. Now what I'm trading. I'm always looking at the markets with the top-down analysis approach. I'm always looking at the higher time frame. And by doing so, you're not only puts the odds in my favor, and it gives me the higher probability trade setups, but actually keeps me out of trades as well, which increases my win to lost ratio.

So, here you can see how I would typically set up my screens. I used the multi timeframe analysis. Now let's assume that I'm trading on the one hour time chart. I always want to be aware of what's going on on the four hour and indeed the daily. So we start off by plotting our key levels of support and resistance on the higher time frame. And this is example is going to be the daily down here in the bottom right. So the best way to plot support and resistance. Certainly on the daily and on the higher time frames is to use the line chart. Now the line chart reflects the closing price in that particular time period. Shows you who won the battle. It basically ignores the extremes of the weaks. So we like to use the line chart. These are very powerful levels on the daily and set me on the weekly as well.

So it's imperative as a trader. Do you know exactly where these levels are on the higher time frames. We plot these in at the key turning points, or levels that have been respected on more than one occasion. Perhaps plot one in there as well and another one goes in there. And then we toggle back to the candlestick chart and that basically shows you now but the weaks and how they weaks basically were the extremes. But the closing price is the important part. Now once you've done the daily, we drill down to the four hour and do exactly the same. And now the trick is not to place lines of every turn, but just the key levels. Otherwise you'll have more lines on the chart, and you'll end up never may never take a trade. So just kick click your lines in at the key levels the key turning points. But as I say it's imperative that you know what these levels are on the higher time periods from from what you're trading. Now of course, I'm gonna be looking at trading on the one-hour time period.

But now I've got these levels on my chart. So I know exactly where levels are of significance either whether I'm going to trade. Counter-trend off these or indeed fall to use these lines to keep me out of trades or indeed for pullbacks into previous support which often becomes resistance and previous resistance often becoming support. So when you're trading it's always worth having a cast to the right of the screen. In my case, to look at the higher time periods to make sure that you're not coming into a key level.

Now you need to update these periodically, maybe several times a week, just go back and we plot the four hours certainly, maybe do the daily once a week. I generally like to do mine on a Sunday before the trading week begins. But it's imperative that you know where these key levels are on the multi timeframes. Now another very powerful way or the the higher time frames is to look for price action. Certain candlestick pattern formations at key levels.

So for example here on the daily, you see here that we had a very nice bullish pin bar at the bottom of this downtrend indicating that a trend reversal could be potentially on the way. And indeed at the top of this trend we had this bearish pinbar coming in at this level of previous resistance, indicating that a potential trend is reversing. It came back down on herself. And at the top here we see a bearish engulfing pattern again indicating that a potential reversal of trend that we discussed . This is one of our strategies indeed that we talked about in our training room every day at forexsignals.com. So check that out if you haven't already done, so. Now I think the number two reason why many traders fail in the market when they first take up training is because they are trying to outwit the market.

They're trying to be clever. They're trying to pick tops. They're trying to big bottoms. They're tall in the market overbought or they're calling the market oversold, trying to predict the exact turning point of a market. Which is very very difficult even for the experienced trader. What I like to do as a trader, and I've been training for over thirty years is to follow the trend. We've all heard the expression the trend is your friend and that's the way I like to attack the market on an intraday basis. Typically, I'll have my screens looking something like this, so on the daily and on the four hour I will have the fanned out moving averages. I use the 10 the 20 and the 40 on both these time periods. I wait to see the markets fanning out and pointing in a particular direction.

In this case they're all pointing up and price is above the moving averages. So I am now only going to be looking for long trades in the dollar against the yen on the hourly time period. Now I'm gonna wait for pull backs in the market. I'm not going to just buy at the top. I'm gonna wait for pull backs and areas of confluence. Look here! This markets been trending up in the one hour. There's certainly there have been opportunities to try and pick tops and bottoms of this market. You could have picked the top there and you could have got 70 pips out of it. Had you got that one right. You could have picked the top here and got another 70 pips. You could have picked the top here, and if you were to pick the bottom, you know called 40 pips.

But it requires a high degree of accuracy to pick these tops and bottoms. These swing highs and their swing lows. Isn't it far better? Far more opportunity to go with the trend once you've seen it on the higher time frames and that the market do the work for you. Rather than you predict that the turning points are gonna happen. Now a way that I like to get into the market I like to look for confirmation or confidence. So I like to look for certain price action. I'd like to see these pin bars. You see one here. You see one here. There's a bigger one here. When prices come back through these levels of moving average levels that I've got drawn in here or indeed levels of support or resistance. You've got on the higher time frames. You remember we spoke about the high time frame analysis. When you see these pin bars coming in to these levels, and the markets basically trading lower.

And then the bulls take control and push the market back up and closes higher. That's basically a hammer candle or put a bullish pin bar. That's a very positive candle. There's another one in there as well, and there's another one in there as well. There's one there as well. So plenty of opportunities to look for areas of confluence. I also like to look at a 50% pullback. It's a very common retracement level. So I plot a level of potential support to a recent swing high and then wait for the market to come back and and pull back 50% of that move.

That's another level when you see price action at that level like a pin bar or something like that then that again is a very powerful level in order to enter the market. Areas of confluence with the trend is a very powerful way. Many people make the mistake common mistake of trying to pick the swing highs and the swing lows in order to outwit the market. And lastly the third reason why I think many traders fail in this business is because they are over complicating it. They are loading up their screens with masses amounts of indicators. They're out there looking for the Holy Grails, and they've put all these things on their charts, and then all of a sudden. They can't even see the candle for the indicators. Now there's a real common reason people are thinking that they've found the magic sauce to trading by their certain indicators. That's been around for 20 years and has made no one a very rich.

The best way to trade these markets is to have completely clean charts to wipe off all these indicators. Get yourself back to just pure price action. Maybe with a couple of moving averages and maximum possibly one indicator. But that's a real common problem that a lot of trainers have and I think it needs to be wiped out. So those are the three common areas where people are failing in this business First of all they don't look at the bigger picture. They don't analyze the market with the top-down analysis. Secondly, they are not following the trend. Following the trend has it's massive advantages for the new trader.

Trying to pick tops and bottoms although it can be done, it's a very very hard task even for the experienced. And lastly over complication with a mass of indicators. Cut it out! As always I hope you found this video useful. Give me a thumbs up if you did. Give me a thumbs down if you didn't. I'd always leave a comment.

I try to get back to as many as I can. Subscribe to the channel if you haven't already done so. And don't forget to follow us on Instagram as well to keep abreast of everything that's going on here at forexsignals.com. Till the next video happy trading and good luck! .

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