When you’re a newbie trader, making mistakes is inevitable. In fact, you’re probably going to be making a lot of mistakes while getting to the top. But that’s okay! It’s all part of the learning process, after all.
However, a mistake is only a mistake if it was made around twice. If it was still repeated a third time, then it’s already a choice. That’s why when you make a mistake, you need to be well aware that you made a mistake and how to rectify it– otherwise you’ll just keep on repeating it and repeating it until you burn your account.
So for the new Forex traders out there, we compiled 4 of the most common mistakes that are made. Watch out for them and learn from them.
Check them out below:
Mistake 1: Trading Too Much
Probably the number 1 mistake that most new traders make is trading too much. You see, most beginner traders have this notion that if they trade more, they’ll make more money. You need to understand that the Forex game is all about probability.
If you trade too much, you’re bound to run into some low probability trades that can make you lose money in the long run. It’s better to trade less but make high probability trades. This will enable you to accumulate your wealth over time.
Mistake 2: Looking for the “Holy Grail”
A lot of new traders spend countless hours looking for the “holy grail” of trading. They’re looking for indicators or systems that are 100% foolproof. The hard truth of that matter is that there is no “holy grail” of trading. If there was, then everyone would be making money already.
What you need to understand is that there are systems and analytical tools that are helpful in your trading and will give you an edge. But it is still up to the individual trader’s skill to utilize these tools in order to make money.
So remember that there is no “holy grail” system or indicator. Forex trading is a long term commitment that you need to put in a lot of time and effort into so you can master it.
Mistake 3: Not Setting a Stop Loss and Take Profit
This mistake is made not only by newbie traders but also some intermediate traders as well. A lot of traders make the mistake of not putting a stop loss because they just can’t accept the idea of loss.
That’s why it’s really common for some traders to move their stop losses to wider levels when the price is hitting close. Some even completely take out their stop losses in hopes that the price will hit a reversal level.
But remember that a losing trade is a losing trade no matter what you do. That’s why you must always follow a system that allows you to logically set your stop loss.
The same thing goes for your take profit. With the take profit, lots of traders tend to get greedy which is why they take out their take profits if they feel like the market will go their way.
Once again, follow your trading plan and don’t deviate from it, otherwise you will suffer a heavy drawdown.
Mistake 4: Shifting From One System to Another
This is probably something that you’ll do in your first few weeks of trading. Since there is so much information about Forex trading on the internet, it’s quite easy to be sucked up in the whole hype game wherein various “gurus” will tell you that their systems can give you guaranteed profits.
As we’ve mentioned earlier, there are no guarantees in Forex. Your profits are determined by your own individual skills as a trader. That’s why legitimate mentorship is very important.
If you don’t have a good mentor, you’ll fall prey to empty promises that some people on the web offer. With a good mentor or Forex coach, you’re sure of a system that’s proven to work.
So instead of shifting from one system or strategy to another, find yourself a reputable coach, learn his or her system, and keep on practicing. With enough clout, you can definitely make money.
If you happen to be looking for a reputable mentor, look no further. Learn to Trade has some of the best coaches in the biz.
Book a workshop today by clicking on the link below to start your trading journey.
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Information on this page is solely for educational purposes only and is not in any way a recommendation to buy or sell certain assets. You should do your thorough research before investing in any type of asset. Learn to trade does not fully guarantee that this information is free from errors or misstatements. It also does not ensure that the information is completely timely. Investing in the Foreign Exchange Market involves a great deal of risk, resulting in the loss of a portion or your full investment. All risks, losses, and costs associated with investing, including total loss of principal and emotional distress, are your responsibility.