11 Common Mistakes of Forex Traders

By: Kelvin Chan

Over the course of my forex trading career and coaching, I've noticed that there are many mistakes and blunders that both beginner traders and advanced traders would commit. Out of these many possible mistakes, I'm going to be discussing a little about 11 of them.

#1 - Trading on other people's tips/advice/opinions

Listen! You never ever learn to trade if you always make trades based on what other fellow traders tell you (otherwise known as tips or advice or opinions). Successful traders tend to make their own decisions

#2 - Overtrading

Even the best of traders make this mistake. Never ever allow yourself to overtrade (in terms of number of trades and in trade sizes).

#3 - Trading without a stop loss

You can get away with this once or twice. But if you keep trading without a stop loss, it will become the mother of your biggest loss. You can count on me for this.

#4 - Trading to gain back losses immediately (revenge trading)

Needless to say, whenever you get emotional via revenge trading, you've already started on the wrong foot. Never get emotional please!

#5 - Getting real emotional (Roller-coaster ride to say the least)

Point number 4 bears repeating. The moment you sense yourself getting emotional, GET AWAY FROM THAT TRADING DESK! (I hope I've made myself clear)

#6 - Trading for fear of losing potential profit (A.K.A chasing the market)

This is otherwise more commonly known as greed. You should know by now that greed and fear always precedes a downfall.

#7 - Unwilling to take a loss and move on

The best traders take a loss as if it is normal and part and parcel of business. Learn from them.

#8 - Trading just for the sake of trading

Don't start doing this. Trade only when you see a profitable trade setup.

#9 - Not having a target exit based on either number of pips or price level

If you have no idea where you plan to get out, why get in in the first place?

#10 - Telling myself market will reverse when charts don't support that view

Listen to your brains and your gut. They'll warn you way before shit happens.

#11 - Not having an effective strategy for news trading

For news traders, you need to be fighting against factors that will make it difficult for you to profit such as gaps and widening spreads. You need an effective strategy against these to be successful.

Ok, I hope I've really contributed to your forex trading. If you need to reread, please take the time to do so. It will be worth it. All the best and good trading!

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