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Forex trading is often a very lonely profession which is why so many traders like visiting forex forums and chatting with other like-minded traders. However, what a lot of people don't realise is that forex forums can actually be responsible for making a dent in your bankroll.
Why?
Well there are a few reasons for this.
Firstly, if you visit any forex forum you will nearly always find that there are some posters who love broadcasting their trading positions to the other forum members and enjoy the attention they get from their loyal followers. It's basically an ego trip. If they make a few good calls, then they seem to get instant adoration and inexperienced traders will start to follow them and even copy their positions.
This is a trap that you really don't want to fall into. The minute you find yourself copying other peoples' positions is the time when you should take a step back and have a good look at yourself.
You may not even realise you're doing it. For example, you may consider taking a position but decide to go to the forums to see if other traders are taking the same position, for confirmation. It's important to note that just because lots of people on the forum are all taking long positions, for example, the price will not necessarily go up.
I was on a forum last week and nearly all of the regular forum members were going long on the GBP/USD. However all of my indicators were indicating that we were heavily overbought, and despite being in the majority I traded using my own tried and trusted system, took a short position, and as I
write this article the GBP/USD is about 210 points lower.
So always make your own trading decisions and then you only have yourself to blame. Don't look to others for advice or confirmation.
Similarly, on the other side of the coin, you don't want to be the one who goes onto forums and boasts about how good a trader you are and announce your positions to everyone. This may boost your ego but it can affect your trading.
For example, if you announce your latest position to the forum and it quickly moves against you, you may disregard your normal stop loss policy and stay in a position longer than necessary in order to justify your position to your loyal followers. This could lead to even further losses.
So please don't become one of these people. After all do you really think the best traders in the world hang around on forex forums? No of course they don't, they're too busy making money.
Finally there is one other way in which forex forums can damage your wealth and that's by following systems given on forums. Sure you can pick up some great ideas, but be careful about jumping in and blindly following the latest new trading system.
Always be sure to thoroughly back-test any system you may come across and either use a demo account to test it out for a period of time or use very small stakes.
Forex forums can be a very valuable resource for learning new trading ideas and strategies, but be careful about blindly following any one system or poster, and try not to start broadcasting your positions as soon as you achieve any level of success.
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