Trading may look easy but making profits can be tough. It doesnt matter whether new or experienced, almost all of the traders sometimes (including me) make the same mistakes over and over again. So, here are what I think that top mistakes traders make.
Being Too Emotional
You have to be psychologically prepared before start trading. Your trading strategy may be perfect but your emotions can change the result due to the fact that trading with the help of the leverage can be very stressful. Stick to your trading strategy, stay calm and try not to take too emotional decisions. Test yourself with mini or micro lots then when you think you are psychologically ready, start increasing your transaction sizes. Dont try to take revenge from the market after a losing trade. Otherwise, I assure you that you are going to suffer even further.
Choosing a Scam Forex Broker
There are many scam brokers all over the internet so you have to be careful. That’s why I compare and review brokers in my personal blog. You have to do your research before start trading with your broker. Otherwise, you can lose all of your investment even before start trading. Take your time while choosing a broker. You can check my personal reviews on my Top Forex Brokers List. If broker that you found is reliable, then compare regulation, leverage, spreads, account types, deposit and withdrawal methods, etc. before making your final decision.
Trading Without a Plan
Every successful trader has their own trading strategy. Decide your take profit and stop/loss levels, how much capital you are willing to risk for each trade, etc. Always keep testing yourself with different systems until you develop your own trading strategy. Remember, you can’t make money without a plan.
Trading Without Stop/Loss
You should always use stop/loss order every time you open a trade. Decide your stop/loss and take profit levels before executing an order. Because when the things go wrong and you start losing money it is always hard to close that trade manually. Believe me, you don’t want to risk all of your capital on only one trade. If your trade is closed with a loss, accept the loss and focus on your next trade. And don’t remove or change the level of your stop/loss after you opened your trade.
Trading too frequently can be a big mistake. Experienced traders usually don’t do this mistake but it is a big threat for new traders. It is easy for new traders to fall into the false thinking that more trades mean more profits. However, trading without a setup or good reason brings nothing more than loss and frustration.
Using Leverage in Wrong Way
Like I always say, leverage is a double-edged sword. It can be very helpful while going along with the trend but when the trend changes, using high leverage can be a big threat. What I mean by saying using high leverage is to open trades with big transaction size (lot). If you are new to forex trading, you should trade with low lot size at least for three months in order not to blow up your account.