Wednesday, January 30, 2008

7 signs of bad investment

Buying stocks on stock market or taking positions on Forex, often involves great deal of emotions, especially when you invest a lot of money, or you are starting out with trading and you are not comfortable with putting your money on the risk.

When it comes to money emotions are hard to control however, before you make decision to put money into some stocks, you can try to determine if there are any deadly signs of bad investment behind your decision. (For a full article visit ASXNewbie website, i will just list quickly those signs and make my comments on it).

Here they are: 7 signs of bad investment
  1. Research, lack of research is probably one of the greatest mistake you can make, if you make good research, then you can get at least some confidence in your trade, which is important when it goes bad at the beginning.
  2. Hesitation on fundamentals, this mainly applies to stock market, Forex traders rearly have to focus on fundamental data
  3. Buying stocks for long term with no end in mind, it speaks for itself.
  4. Not being aware of important announcements, on Forex it is useful to know when important economic data will be released, such as employment situation which is responsible for a big price changes in short time.
  5. Sometimes investment needs care, especially if you trade long term
  6. It is not a shame to get rid of bad investment or position, this goes back to the do not risk more then 5% of your capital on the single trade.
  7. Doing what everyone else is doing, this is often mistake of unexperienced trader, be your own guru, do not look at other to know what to do, especially if they are losesr.
Mentioned article is more relevent to stock market, so i changed a bit all seven points to make them fit perfectly Forex market.

14 comments:

Teena robert said...

You are absolutely right but these 7 signs are not sufficient. Some more signs are here like Emotional Trading, the basic rule for Forex trading is remove your emotions before starting trade in Forex market. If you are novice then without Learning Forex you should not start trading.

Thomas said...

Good Post! these signs are right but there are much more...to trade right you must Learn Forex trading . Good luck!

Luisana Maria said...

What is margin?

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Rakiba Tahsan said...

If you are a new trader, then please don’t invest your money here emotionally! In addition, never invest your all of money into one single trading account! On the other hand, you have to use regulated broker only as thus type of broker can provide you 100% capital security! Such as, I get best live trading environment from TradingBanks broker and 100% capital security as this one is a ECN type Forex broker!

Digital Equity said...

Great post over there. I see many traders fall into these signs and lose all their capital but most important point over here is choosing a right broker. The investments you are trying to invest lies with the broker and if the broker tweaks your entries and blocks your withdrawals, the profits as well as the whole capital is at high risk. So, it is very important to choose a broker first before thinking about other investment aspects. I highly recommend ECNCAPITAL.com over all the brokers out there as they are pretty honest and quite reliable and supportive as well. I give them five stars.

Md Torikul said...

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Mustakin Raja said...

Much appreciation to you for this beguiling piece of including. I would expect more articles from you. I do love Options trading. I incline toward lxmarkets as one of the best options broker and i trade with them and never at whatever point found any issues with the trading and in like manner withdrawal. I believe that its incredible broker. I am light to trade with such a standard broker with sharp payout.

Md Torikul said...

Forex trading is a long term process. We need to work hard on this market to gain something from here. So when we can achieve it then we should invest here. We should work with a good broker to have good support as well as a goodsecurity from them. Such as I am trading with a broker called Trade12 having maximum high leverage up to 1:400, low spread and smart support all the time. I read out their e book, Forex glossary and video tutorials to expand my trading experience. This is awesome and no withdrawl problem they create with taking no set up fees.

nisshobdo niyoti said...

There is no way to get success instantly in foreign exchange trading. A trader should be very cautious about spending or investing their money. This is the hardest part of forex trading because there is short way to search the trustworthy exchange broker for forex trader trading. Knowing your broker only can make you successful in this industry like I know my broker ECNCAPITAL. They are reliable broker for all traders.

Md Torikul said...

Investment is a big fact in Forex market. We should not invest in such a broker which will have bad impact on our investment. So I have chosen Trade12 having a good security. That’s why I have invested here. Trade12 having high leverage, low spread, quick execution, no set up fees, no dealing desk and reqoutes problems are available here. They having a high security level like they use different bank accounts to provide securities.

Michel Stuart said...

I truly admire your work here. I also think all this point is very vital for our trading in forex. One should not invest here without any kind of knowledge and preparation. Fundamental knowledge is essential to be particular on taking trade. Nowadays smart trading use SL and TP. Without this taking trade become riskier. Moreover you have to be aware of international economic news before trading. It can cost you your full invest if you do not do so. I have learned all this from my broker AAFX.

Md Torikul said...

I have been trading with Trade12 broker for a long time. As a trader I get the pure security from here. They use several reputed bank accounts to provide security to their traders. I have fast execution, high leverage, the lowest spread and lower transaction cost with this broker. So invest on this broker was my best decision.

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