10 Forex Trading Mistakes to Avoid - Part 1

Despite some excessively optimistic advertising messages, Forex trading is a challenging experience, potentially full of satisfaction but also risks. The risk of taking a reckless step and consequently losing your capital in a short time is always present. Guides often focus on things to do, give advice, suggest techniques, and so on. However, few focus on mistakes, that is, things not to do. This article focuses precisely on this aspect. In the first part, we will discuss general mistakes that concern the attitude and psychology of the trader. Being unprepared. Forex is not a game of chance. Luck, although relevant as in all aspects of life, is not a resource you can rely on. Knowledge, however, is. Unfortunately, many aspiring traders, attracted by simplistic advertising campaigns, start investing without a solid background of skills. This is the most serious mistake, which leads to failure in 100% of cases. Therefore, it is necessary to study. There is no shortage of sources: ebooks, printed texts, forums, blogs, online courses, video tutorials. From this point of view, there are two problems. The first is the organization of the training path. There are no official trading schools, so the only option is the self-taught route. In reality, some far-sighted brokers provide fairly comprehensive study programs that can be taken as reference points. The second problem is practice. This can be easily solved by signing up for a demo account. Expecting easy profits. This is another typical mistake, potentially harbinger of misfortune. It is good for beginners to know right away, even before starting, that Forex trading is an activity fraught with difficulties and obstacles. There are no easy meals, in life as in the market. It is a competitive environment, where no one gives anything away. Believing the opposite automatically leads to reckless actions and consequently losing your capital. Getting emotionally involved. The best trader is a cold, rational, and determined trader. There is no room for emotions in trading. Emotions represent a force capable of compromising lucidity, preventing the investor from making logical choices, stopping when they should stop, and moving forward when they should move forward. To be clear, emotions refer to both negative and positive ones. Fear hurts more than euphoria. The former paralyzes and forces the trader to miss numerous trains. The latter favors a reckless attitude, which transforms trading activity into gambling. Not planning. Strategy is a fundamental resource for all traders for at least two reasons. The first allows you to repel the assaults... Of emotions. If everything is planned, if a reaction has already been assigned to each unforeseen event, if the trader knows what to do and when to do it, then the decision-making space narrows. But it narrows exactly when it's good that it does: at the moment of operation, when lucidity can fail. The second reason consists of a simple fact: the strategic approach allows you to remain focused on your goals, to build the path to profit and travel it easily. Not doing money and risk management. Trading without knowing how much you can afford to lose and risk is a huge mistake. Forex trading is not all roses, far from it. It is necessary to take into account that "a few euros", at the very least, will be left by the wayside. So it is better to quantify, identify your limits and create a strategy based on this information. There is no strategy without money management, at least not a strategy that can be defined as effective. Also read: 10 Things You Should NOT Do in Forex Trading - Part 2