The most common traders’ mistakes
This article would be very useful for both professional and beginner forex traders. The first and most common mistake is the desire to get rich fast. This mistake and misunderstanding is often caused by false broker advertising. Sometimes, brokers promise unreal returns on investment and quick realization of all your dreams. When a trader opens an account with such set of mind there are will be possible negative consequences.
A very critical mistake that most beginners do is opening a huge number of trades and having always opened trades. However, trading the whole point in trading is not the quantity of the trades one opens but their quality.
Another mistake that many traders make is ignoring basic money management rules. The selecting of leverage is often underestimated by beginners not realizing how important it is. Leverage is a double-edged knife. Selecting a higher leverage allows you to open bigger trades with less capital. This means that with less money you can make more profit. However, at the same time this means that your loss can also be bigger. Beginners mainly focus on the profits that they will make forgetting to pay attention to the potential losses that may occur. The bigger the trade the higher the profit or loss. This is a driving factor why novice traders sometimes open big positions risking 50% of their capital in a single trade and then if they lose they simply accuse the broker of cheating.
Another common mistake is the lack of discipline and systematic trading pattern. If you decide to trade on the forex market you should always make sure when and why you are opening a certain trade. Moreover, it is important to know the timeframe of the trade and how much you are willing to lose from that particular position. If you have already figured out a profitable system for you, always stick to it. It is not a good idea to change your trading patterns very often.
All in all, being a successful trader is not an easy task and requires plenty of knowledge. There is no doubt that if you want to be successful you will need to learn many different aspects of trading such as technical and fundamental analysis, money management rules, phycology and many more. It is important to mention that the learning process is ongoing and is never over. There is always more to read and understand. It is crucial to keep yourself updated of currencies movement and different factors that are affecting that.