“Learn from the mistakes of others; you can’t live long enough to make them all yourself.”
You should indeed learn from other people’s mistakes because not everyone has the potential to recover after a disaster.
Correspondingly, Forex trading is the same. Forex trading doesn’t allow you to make too many mistakes. You fall once or twice, and you’re done because the scale of damage is enormous in Forex. So before you make all these mistakes yourself, it’s better to learn from other traders’ mistakes.
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Today’s topic revolves around 9 lethal mistakes you can make as a newbie Forex trader. Keep reading until the end to enlighten yourself with this knowledge and prevent making similar mistakes while trading.
So let’s get started with this.
9 Major Mistakes New Traders Make in the Forex Market
Acknowledge yourself with the following 9 mistakes you can make as a Forex trader.
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Not Being Instinctive
Instinct is an inner voice in your head that conveys a message to you when you move forwards. Unlike emotions, it’s not affected by external things. It comes from your inner self telling you something.
New Forex traders mostly ignore this thing while calling a trade. Sometimes your instincts can tell if you should execute a trade or not. You must understand that listening to your instincts while trading is fine. If you don’t feel alright about trade on a specific day, it’s fine to call it off until you feel like doing it.
Moving on to the 2nd mistake:
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Trading with Emotions
Always remember a PRO trader is never carried away by emotions.
Sometimes you might feel a strong emotional grip forcing you to execute a trade, and that’s where you must stop.
As a Forex trader, you should be emotionally intelligent. If you’re too controlled by emotions, you can be easily trapped in FOMO(fear of missing out).
Up next, on number 3, we have:
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Not Taking Time Off
“One day favors you, and the next betrays you.”
Make the above saying your mantra for Forex trading.
The forex market works quite close to the quote. One day favors you with a fortune, and the other betrays you with losses. If you’re losing continuously in the Forex market, it’s better to take time off from trading until conditions turn in your favor.
The next mistake that we are going to talk about is pretty common and detrimental:
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Trading Without Stop Loss
It’s shocking how much new traders ignore this life-saving feature. Stop-loss can save you from liquidating your budget.
It’s good to feel confident about your trades, but being over-confident is not intelligent. You don’t know when the market can take a turn for you or against you; if it goes against you, you better prepare for it.
Stops-loss can not save your exact budget, but it can minimize your losses significantly. So it’s better to use them to keep your trading account.
Moving forward on our list, we will now discuss the following:
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Going All-In to Win it All Back
The biggest blunder you can make as a new Forex trader is going all in to win it all back.
As we discussed above, you can have bad days in trading, but you can make it worse by risking your remaining amount to win it all back. Remember that Forex is not a “winner takes it all” market. So stay away from this lethal mistake at all costs.
On number 6th, we have:
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Risking More Than Your Affordability
The best way to go default is to risk more than your affordability.
Let’s recall the basic rule: never invest all your money in Forex trading. You should only invest the amount you can afford to lose since you’re in a high-risk market.
Never risk all your money just because some experts believe in “high risk for high returns.” Always define your limits financially before entering the Forex market.
Up next, on number 7th, we will talk about:
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Choosing the Wrong Marketplace
Even if all your requirement boxes are checked, something can still drown your boat.
Trading with a non-reputable and non-reliable marketplace is like surfing the sea in a boat with a hole. A good trader needs an excellent platform to flourish his skills and accomplish achievements in his trading career.
So choose a good Forex exchange that provides you with the best trading options in terms of assets and features.
On number 8th, we have:
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Not Diversifying Your Portfolio
Portfolio diversification is another vital point to remember.
New traders are too prone toward famous assets, leading them to invest all amounts in a single asset. It’s good to be confident about a specific currency pair, but it’s not a wise move. You should diversify your portfolio with other currency pairs too.
So in case one asset underperforms, the other can neutralize the adverse effects on your budget.
Finally, the last point o our today’s list is:
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Trading Without a Proper Plan
There’s absolutely nothing I can do
“By failing to prepare, you are preparing to fail.”
Don’t expect yourself to achieve the pinnacle of Forex trading without a proper trading plan. No one gets up there without doing something extraordinary. You will find many traders who are just trading casually without a strategy.
Casual trading won’t make you the expert in this craft. To prepare a good plan, you first need to define your goal with trading. For example, you need to visualize how much profit you want to make daily and how much you can risk. After having a goal, you need to construct a proper plan to achieve those goals.
The Bottom Line
It is good to make mistakes and learn from them. However, making the above-stated mistakes in the Forex market can ruin your account. Moreover, sometimes these mistakes can cause damage beyond repair. So it’s crucial for you to know about them as a new Forex trader.
We have provided you with a list of 9 lethal mistakes you can make as a new Forex trader. We hope you’ll have a smooth trading journey by taking preventive measures.
Which mistake do you find the most lethal from the above? Tell us in the comments down below.
