Mistakes That Forex Traders Make

[ellliottt]

I would like to share with you information about the common mistakes a trader should avoid when getting started in forex trading. This is a list of common forex trading mistakes.

 

1. Using Too Much Leverage

One of the biggest advantages of forex trading is the ability to use leverage or trading on margin. One of the most common mistakes that forex traders make is using too much leverage. Using too much leverage is when you have a small account balance, but make a big trade. If the market moves against your position by just a small amount, it can result in large losses. Commonly, the beginning forex trader will get emotional and nervous and close the trade for a sizable loss.

 

2. Over Trading

Over Trading occurs when traders try to look for trading opportunities that are not really there. It happens to new traders very often, because they just want to trade. The result is usually a poorly executed trade that results in an eventual loss. Over trading can also result in traders making too many trades at once and using too much margin.

 

3. Picking Tops and Bottoms

Many new traders attempt to try to pinpoint where a currency pair will turn around and start moving the opposite direction. This is something that is difficult even for professional traders.

[boniez]

over-trading is the one thing that most causes of failure of the trader, because for those who do not yet have a stable psychology would have been tempted by the profits they are to do it overly and it is precisely the result will be loss

[Kobkeaw]

Over trading is very danger for newbies traders. Because THey have too much greed and Try to invest very much.

I think all of 3 choice is dangers and lead to loosing money.

[indieover]

i don't know if using too much leverage is a disadvantage. i think using too much lot is more disadvantageous. cause when i use big leverage in one trading platform i don't see effect of having too much leverage. but choosing too much lot or bigger lot has big effect actually.

[Nagilover]

We don't allow our emotion overcome our decision. Because It's very danger if emotion overcome decision in trading.

Because It lead to loosing money very easy.

[wasi90lkv1]

i agree with no. 2. i think often many traders trade too many times in one day, they lose focus and lose money. i think traders should have daily goals and once they reach the goals daily they should take breaks.

[mownabratadey]

I think all newcomers are doing this type of mistakes that could take them at big loss, nothing else, Either Their greed leads them to do that or they don't have enough skill how to work, so better to try with demo accounts virtually & get some experiences to overcome those mistakes in real trading..

[mundi]

This article is very useful, especially I am still a newbie ...

there are many mistakes that can be made a traders ... this be a lesson for me

[Hunter]

not using stop loss,take profit to take huge profit is one the big mistake newbies make in forex trading.also as mention by others over trading can kil your profit if you aren't very sure about the moves and doesn't have much knowledge in forex.

[boniez]

not using stop loss,take profit to take huge profit is one the big mistake newbies make in forex trading.also as mention by others over trading can kil your profit if you aren't very sure about the moves and doesn't have much knowledge in forex.

therefore they provide indicator strategy which we can use to determined when we will open, close, stop and take profit, however those are thebasic skill and newbie should know before goess to trade in the real account

[t2t]

Before anyone start trading forex you need to know or be taught about money management. Looking at the first lesson, you will notice that it warns about using high leverage. If you have small fund in your account and opt for a high leverage, and incidentally the market turns against you, you will end up losing all your trading fund. Then you will understand the power of managing money.

[standart]

1:100 leverage is different with 1:500 leverage. smaller leverage make us possible to trading with smaller lot or if choose 1:100, we can trading with $0.01 as smallest lot. but if 1:500 leverage, smallest lot is $0.10.

[mohamedA]

Any trader should know what an leverage , this thing is so important and maybe it decide the way that trader will follow after , second important thing to avoid is feeling , never put your feeling in your trade no fair no happiness , and last thing to avoid is over trading , we should control our self if we loose let's close the software let's review our technique and the reason why we made it . Trying to change fast our choice will destroy us even some time we get profits .

[sirwilly]

Regarding the issue of picking tops and bottoms, it is not nearly that easy. It is better for the trader to think f the support and resistance levels as zones rather than specific points.

[andry777]

@elliott

I don't understand with your first point about using too much leverage. I think that is not only leverage that will determine our risk and profit

in forex market but also how much volume of lot size that you used in each transaction. And the most determine is not leverage but lot size.

So using high or low leverage, if you used low lot size that will be lower risk too.

[chuna1985]

Andry is right, i is not only high leverage that makes forex trading risky, but the major is lot sizes. It is high lot sizes that can lead to losses in our trades, i mean heavy losses, or even margin call. The concept of leverage and lot sizes must be learnt by all trades in order to make competent decisions in our trading career.

[girlaloosh01]

over-trading is the one thing that most causes of failure of the trader, because for those who do not yet have a stable psychology would have been tempted by the profits they are to do it overly and it is precisely the result will be loss

 

Since a lot of traders are engaged in forex because for them the main goal of engaging to this kind of

business is to gain profit. That's why a lot of traders who are really "obsessed" with money suffer in overtrading

because of too much greed for money. And so with this, they just end up by losing all their capital.

[andry777]

@chuna

Yes, that was right. Low and high leverage that we used, that will only give value each pips that we used in trading.

But our risk will be determined by our lot size that we used in each transaction too. Usually, scalping will use higher lot size.

[boniez]

@chuna

Yes, that was right. Low and high leverage that we used, that will only give value each pips that we used in trading.

But our risk will be determined by our lot size that we used in each transaction too. Usually, scalping will use higher lot size.

but still leverage size affect endurance of our margin , because if you use a little leverage and use a small fund as well, then that will also cause we can not use the minimum lot which pprovided by the broker

[ahmedrz3]

all new forex members fall in small mistakes that make them leaving with big losses . I can say the most important thing that members should take into cosidration like you must set your own target plan before you enter the market ,this means not to open and close the market many times this will lead to a big corruption means big loss

[boniez]

all new forex members fall in small mistakes that make them leaving with big losses . I can say the most important thing that members should take into cosidration like you must set your own target plan before you enter the market ,this means not to open and close the market many times this will lead to a big corruption means big loss

mature plan is needed, such as preparation of funds or daily targets, because it is useful to avoid the occurrence of overtrade or not trading at all.

[andry777]

@boniez

Yes, we must plan our trading and trade our planning. Many traders could obey their own trading plan because they couldn't control

their own emotions well. And many other traders who didn't have planning in trading. Both of them are dangerous, didn't do planning and

didn't have planning.

[standart]

@andry777

trading plan is necessary as profit system. if trader not create it and have no purpose, usually can't survive long or even generate good profit in trading. after have a trading plan, trader should have patient attitude and trading keep on their plan.

[Nikhil]

@standart you are absolutely correct because without trading plan how any trader will move . and its very true good trading plan give us continue profit but the problem is for newbie that at starting they dont have any plan which is natural because of lack of knowledge but they must learn about this to become successful.

[andry777]

@standart

Yes, it's really important to create trading plan but it's more important if we could follow to trading plan which we have made.

So trading plan and attitude is really important, without good trading plan we could get good profits and without good attitude,

we couldn't get consistent profit.