Author: Ferris MaloneIn the Forex market, there is both the potential to succeed greatly and the potential to lose greatly. Avoiding the mistakes and blunders that cause these losses can be relatively easy if you keep yourself focused and don't make too many mistakes. I have compiled a list of 15 moree mistakes many trafers make, in the hope that it will prevent you from making these same bad decisions yourself. Follow this advice and it will keep you going straight on the road to financial gain and trading profit.
1 - Trading without a plan. It cannot be emphasized enough that in order to trade well and make money, you have to have a system and a strategy. You can not just rely on spontaneous decisions and instincts. Trading is a science and an art and it cannot be done without an organized, reasonable, tested strategy.
2 - Being dependent on other people. Relying on other people to make your decisions limits you tremendously and can hurt you. Being independent in your trading is ultimately the best decision. That way you have control over your future in Forex trading.
3 - Insufficient education. It is highly critical that you do not start trading until you are sure that you know what you are doing. Setting out ignorantly or with insufficient preparation into the Forex market is a definite recipe for failure. You must be thoroughly acquainted with the details of Forex trading!
4 - Rash and impetuous trading. We humans are very much prone to rely on our emotions and our instincts versus our mind and our set plans and preparations. While in some instances of life this can be a good thing, it is never good in Forex! Spontaneous, emotional, unanalyzed decisions only lead to either extremely temporary success or outright failure. Find a system that works for you and stick to it rigidly.
5 - Not enough confidence. This can be a reason we make emotional decisions. If we do not have faith in our own abilities and the plan we have prepared, we will be most likely to panic and act rashly. It is vital to act confidently, calmly, and to think through everything.
6 - Over-analyzing. Though thoughtlessness can be dangerous, thinking too hard about your system can be just as harmful. Keep it simple, with a reasonable, but uncomplicated structure. Try not to have so many little details that can so easily be forgotten and always end up being the ruin of a well-intended plan.
7 - Focusing on long-term plans. You need some ideas for the big picture and the future, but concentrating too much on your long-term strategies causes you to make sloppy or careless short-term decisions. These mistakes are the ones that will affect you the most. So keep your mind on the moment, and focus on the trading at hand.
8 - Lack of goals. Goals are important in order to accomplish anything you want to do in life. Forex trading is the same. Make a list of goals and then create a plan that will help you achieve them. But keep it realistic. Miracles do happen, but not in the Forex market.
9 - Overconfidence. Keep your trading simple, but do not be fooled by simplicity. Trading is still work and still has risks. A statistic shows that 95% of traders lose money. If you are succeeding and doing well, never let your guard down. Constantly be evaluating your system and examining your trading to prevent any mistakes.
10 - Getting excited. It's okay to jump up and down when you win big, and it's normal to have an extra cup of coffee as you nervously hope you didn't make the wrong decision. But never get worked up enough that you can't think straight. Remaining calm does not seem like a crucial thing, but it is. You will not be able to make intelligent and successful decisions if you are excited and emotional.
11 - Leaving the market. It is highly important to stay aware of the market and to stay in the game. You absolutely have to monitor the market and keep yourself informed of changes and fluctuation.
12 - Acting on rumors. Almost all the time, a rumor is no more than a rumor. Don't trust rumors, see for yourself what is going on in the Forex market. Rumors cause many traders to miss chances or to make foolish and damaging decisions.
13 - Being scared of loss. Loss is okay. It happens to every trader in the market. It does not mean that you are a failure and it does not mean that you were not meant to trade Forex. It only means that somewhere in your strategy something went a bit wrong. So instead of panicking, reacting rashly, or plain giving up, just reevaluate your system, work the bugs out, and try again.
14 - Being afraid of hard trades. This goes hand in hand with fearing loss. Never back out of a trade or shy away from it if it seems hard. More often than not, you can do it and come through with more profit than you expected.
15 - Going against the flow. In Forex this is not a wise thing. Trading against the current trend will usually make you end up losing money. There is a reason the trend is prevailing.
I hope some of these tips will keep you from making the mistakes other traders make and help you advance greatly in your Forex trading.
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