When it comes to forex trading, there are literally a thousand different ways to make money. Everything from algorithmic trading to using simple price action and everything in between. Some folks have a passion for fundamentals or coding and therefore need to follow that passion in order to achieve consistent profits. But among the myriad of ways to make money in the forex market, there are certain truths that remain constant regardless of the path you choose.
Forex trading requires psychological features of strength, which most new traders do not have. Successful trading basically comes down to how disciplined you are. You might have the best strategy in the world but if your head isn't in the right place, you will end up making the same forex mistakes as everyone before you and just end up being another statistic. Most traders are disappointed with the unlimited money making potential of the market against their own performance, and are acting out of emotions like desperation, greed or fear, trying to close the gap.
Our own trading expectations are often imposed on the market, leaving us expecting it to act according our desires and trade direction. Expecting to get rich quick is the most common and one of the worst mistakes a trader can do. With the availability of high leverage and low barriers of entry, forex trading has been perceived as a way to make money quickly. Forex trading, just like any type of trading, requires persistence and discipline in the long run. Set long term goals and keep improving day after day and you will see consistent results.
Increasing trade frequency is another common mistake that leads to avoidable losses. Traders should carefully observe their trading behavior and ask themselves whether they are really seeing more valid trading opportunities or if they are entering a status of overtrading. Having a trading plan and a trade checklist can prevent overtrading because you will consciously and actively have to break your trading rules.
The worst forex trading mistake of all is not actually learning anything from your mistakes and repeatedly thinking. If your strategy is getting you nowhere in forex, isn’t it time to just let it go and explore some new options? Whatever you do, embrace your mistakes and learn from them. Use your mistakes as a foundation to build upon your strengths and lessen your weaknesses. No trader becomes a professional trader overnight.