Most common mistakes in Forex Trading

[mumuy]

Most traders do not make money in trading over the long-run for one simple reason: they trade way too much. One curious fact of trading is that most traders do very well on demo accounts, but then when they start trading real money they do horribly. The reason for this is that in demo trading there is virtually no emotion involved since your real money is not on the line. So, this goes to show that emotion is the number one destroyer of trading success. Traders who over-trade are operating purely on emotion.

Furthermore, another common mistake is not applying risk reward and money management correctly, since risk management is critical to achieving success in the markets. Risk management involves controlling your risk per trade to a level that is tolerable for you. Most traders ignore the fact that they could lose on any trade, if you know and accept that you could lose on any trade. Since, why would you ever risk more than you were comfortable with losing?

 

[george55]

To my view traders mainly fail because they don’t have enough trading skills and experience, they are not able to control their emotions and what is most important they fail because of risk management. Risk management is the most important facet of investing. It’s the one that virtually all investors don’t care about or don’t even really think about.

 

[Rambo35]

I think plenty of new traders make the mistake that they think they can learn how to trade in a demo account and once they go live they do not fund their accounts with sufficient capital. They follow what is popular and what the majority does and fail to understand that the majority does fail as traders.

 

[mumuy]

I agree, since in demo-account there is no emotion involved. And once they tried the real account, they fail because of the emotion involved in trading on a real account is real stressful.

 

[gracieJJ]

^true, in demo, when you lose, you just lose. but in real accounts, when you lose, most beginner's mentality(including mine) is "i should get that money back" and end up losing more than they already have

 

[gerski]

Such a nice thread.Helpful and useful.Thank you for posting it here.

 

[jimcarter]

5 common mistakes forex traders make

• Not having a trading plan.
• Not enough research.
• Ignoring economic data and news events.
• Hoping bad trades will come good.
• Taking quick profits and missing out on larger gains.
• Forex trading mistake overviews.

 

[kathleenaustin]

Biggest mistake is lack of discipline and dedication towards trading.Many traders lose their money because they trade on every market condition without any research.

 

[Dutchy86]

A lot of people go for the big money early doors, you’ll soon learn from this. If you go in again you would of gained more knowledge and be in a better place second time around.

 

[wilbertunderwood]

Panic selling even if the market contracts a few places. I have seen traders selling their positions early and regretting later as soon as the prices go up again.

 

[e_abrams]

I've been there and I've done that so many times. It is, indeed, a big mistakes, but it is so hard to overcome it.

 

[HeavenLeighGill]

Overtrading can definitely cause losses in trading, along with trading with no plan and allowing emptions to interfere. Some don't practice proper risk management and trade with extremely high leverage or even choose not to set a SL, which is never a good idea.

 

[reecerispoli1]

Thinking it’s a get Rick quick scheme
It takes time and knowledge

 

[JoshEvansFX]

Most traders do not make money in trading over the long-run for one simple reason: they trade way too much. One curious fact of trading is that most traders do very well on demo accounts, but then when they start trading real money they do horribly. The reason for this is that in demo trading there is virtually no emotion involved since your real money is not on the line. So, this goes to show that emotion is the number one destroyer of trading success. Traders who over-trade are operating purely on emotion.

Furthermore, another common mistake is not applying risk reward and money management correctly, since risk management is critical to achieving success in the markets. Risk management involves controlling your risk per trade to a level that is tolerable for you. Most traders ignore the fact that they could lose on any trade, if you know and accept that you could lose on any trade. Since, why would you ever risk more than you were comfortable with losing?

Well said! Straight to the point, great to see.

 

[BTCETH Trader]

Well said! Straight to the point, great to see.

Where bound to make the same kind of mistakes again and again we would need to improve on that aspect.

 

[sharabela]

Traders often claim that they made money in demo trading but lost in live trading. If you ask them to evaluate, you will find that they lost in demo trading too. They did not count those or thought it just happened. If a trader makes money in demo trading with a solid strategy, he may be able to make money in live trading too. On the other hand, if he can not make money in demo trading, no way he would be able to make consistent profit in a live account.