There are three common Forex mistakes which very often make new traders. All these mistakes related with big opportunities which Forex Trading presents to its investors. Understanding the main mistakes will help you to prevent them while you will plan to make your trades.
1. Big Leverage
One of the big advantages of Forex market is the possibility to use high leverage But the one of the main mistakes, which Forex beginners make, is using too big leverage. This mean, that if you have a small balance on your account - you make a big risk by using too high leverage. Forex market can move against your position (order) and the result can be with much losses. Usually, the beginner of the Forex market in such trading strategy becomes nervous and too emotional, and can’t control the whole situation.
2. Over Trading
Over Trading happens when Forex traders are trying to look for trading possibilities which are not real. This happens with beginners very often because they just want to make trades. The result of this way is usually the losses because of not clear understanding of the real Forex market situation. Over trading can be also as the result if trader makes too many trades at once and uses too much margin.
3. Playing on tops and bottoms
Many new Forex traders often forget the one of the main rules which is “The trend is your friend” and make many mistakes trying to trade on opposite market’s direction while the currency pair is at the top or at the bottom. Actually, this point sometimes becomes difficult even for experienced traders.