Learn to Trade

4 Newbie Forex Mistakes To Watch Out For 

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When you’re a newbie trader, making mistakes is inevitable. In fact, you’re probably going to be making a lot of mistakes while getting to the top. But that’s okay! It’s all part of the learning process, after all. 

However, a mistake is only a mistake if it was made around twice. If it was still repeated a third time, then it’s already a choice. That’s why when you make a mistake, you need to be well aware that you made a mistake and how to rectify it– otherwise you’ll just keep on repeating it and repeating it until you burn your account. 

So for the new Forex traders out there, we compiled 4 of the most common mistakes that are made. Watch out for them and learn from them. 

Check them out below: 

Mistake 1: Trading Too Much 

Probably the number 1 mistake that most new traders make is trading too much. You see, most beginner traders have this notion that if they trade more, they’ll make more money. You need to understand that the Forex game is all about probability. 

If you trade too much, you’re bound to run into some low probability trades that can make you lose money in the long run. It’s better to trade less but make high probability trades. This will enable you to accumulate your wealth over time. 

  

Mistake 2: Looking for the “Holy Grail” 

A lot of new traders spend countless hours looking for the “holy grail” of trading. They’re looking for indicators or systems that are 100% foolproof. The hard truth of that matter is that there is no “holy grail” of trading. If there was, then everyone would be making money already. 

What you need to understand is that there are systems and analytical tools that are helpful in your trading and will give you an edge. But it is still up to the individual trader’s skill to utilize these tools in order to make money. 

So remember that there is no “holy grail” system or indicator. Forex trading is a long term commitment that you need to put in a lot of time and effort into so you can master it. 

  

Mistake 3: Not Setting a Stop Loss and Take Profit 

This mistake is made not only by newbie traders but also some intermediate traders as well. A lot of traders make the mistake of not putting a stop loss because they just can’t accept the idea of loss. 

That’s why it’s really common for some traders to move their stop losses to wider levels when the price is hitting close. Some even completely take out their stop losses in hopes that the price will hit a reversal level. 

But remember that a losing trade is a losing trade no matter what you do. That’s why you must always follow a system that allows you to logically set your stop loss. 

The same thing goes for your take profit. With the take profit, lots of traders tend to get greedy which is why they take out their take profits if they feel like the market will go their way. 

Once again, follow your trading plan and don’t deviate from it, otherwise you will suffer a heavy drawdown. 

  

Mistake 4: Shifting From One System to Another 

This is probably something that you’ll do in your first few weeks of trading. Since there is so much information about Forex trading on the internet, it’s quite easy to be sucked up in the whole hype game wherein various “gurus” will tell you that their systems can give you guaranteed profits. 

As we’ve mentioned earlier, there are no guarantees in Forex. Your profits are determined by your own individual skills as a trader. That’s why legitimate mentorship is very important. 

If you don’t have a good mentor, you’ll fall prey to empty promises that some people on the web offer. With a good mentor or Forex coach, you’re sure of a system that’s proven to work. 

 

So instead of shifting from one system or strategy to another, find yourself a reputable coach, learn his or her system, and keep on practicing. With enough clout, you can definitely make money. 

If you happen to be looking for a reputable mentor, look no further. Learn to Trade has some of the best coaches in the biz. 

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Learn to Trade Pty Ltd (ACN:138178542, AFSL:339557) provides general information and educational courses and materials only. This is not an offer to buy/sell financial products. We do not provide personal advice nor do we consider the needs, objectives or circumstances of any individual.  Financial products are complex and all entail risk of loss. Over-the-counter derivative and foreign exchange products are considered speculative because they are highly leveraged and carry risk of loss beyond your initial investment, hence should only be traded with capital you can afford to lose. Please ensure you obtain professional advice to ensure trading or investing in any financial products is suitable for your circumstances, and ensure you obtain, read and understand any applicable offer document 

 

The information contained herein (“Content”) has been prepared and issued by Learn to Trade Pty Ltd (LTT), and all intellectual property relating to the Content vests with LTT unless otherwise noted. The Content is provided on an as is basis, without warranty (express or implied). Whilst the Content has been prepared with all reasonable care from sources we believe to be reliable, no responsibility or liability shall be accepted by LTT for any errors or omissions or misstatements howsoever caused. No guarantees or warranties regarding accuracy, completeness or fitness for purpose are provided by LTT, and under no circumstances will any of LTT, its officers, representatives, associates or agents be liable for any loss or damage, whether direct, incidental or consequential, caused by reliance on or use of the Content. 

 

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