---

Top 10 Common Forex Traders Mistakes and How to Avoid Them.

1. PAPER TRADING TOO LONG 

Paper trading is hypothetical trading. If you have never traded anything before, you will probably do some paper trading. The benefit of paper trading is that it will help the new trader become acquainted with the basics of interfacing with the markets. This is often a “demo” account with a broker or clearing firm that provides real-time market data but provides a hypothetical balance. You are allowed to buy and sell as much as you want, just like in a “live” or “real” account. 

According to several Forex reviews, Your hypothetical gains and losses are accrued against your hypothetical account balance over time. As time goes on, most traders find that they can gain quite a surprising amount of paper profits in a very short period of time. These traders are now completely convinced that they can easily duplicate those hypothetical results in real-time with real money. 

2. NOT HAVING A TRADING PLAN 

Even the best UK Forex traders take the same attitude with their daily work habits and many don’t even know they do it. Not having a clear and concise plan for your daily trading presence is a serious mistake and you need to address it. The best way to describe a sound plan is to let you read one from a professional full-time trader. 

3. TRADING TOO LARGE FOR YOUR ACCOUNT

It is unrealistic for you to believe you are going to make a killing on THIS ONE TRADE RIGHT NOW. Sure, you might be on the right side of a large move but that will take time and evidence to see. For this moment, any trade you have on has the potential to run the other way against you and if you are trading too large, your potential to lose a lot on only a few trades is huge. No matter your age, education, skill, or experience level you are not going to make 100% winning trades. 

4. VARYING THE SIZE OF YOUR TRADES

In trading, the bedrock basics include trading a size that works for you. Just because you can trade a 50 lot of something doesn’t mean it is a good idea for you to do that. It is a mistake to think that whatever trading size you choose to work with day-to-day will automatically “fit” in your head. 

In fact, when we talked to the top 10 Forex brokers in the world, we found out that the most embarrassing blow-out they have had is the one that came from varying their trade size when doing well. In other words, they were pulling money out of the markets regularly and decided to increase their trade size just because they could; and subsequently, the resulting new levels of equity gains or losses threw off their equilibrium. 

5. OVERTRADING 

Overtrading is easy to spot and simple to stop. First, if you are doing trades your system hasn’t called for you; you are overtrading. If you are adding to a position (trading more) without a profit; you are overtrading. 

If you are reversing after a loss (taking a loss then going the other way) and getting whipsawed; you are overtrading. If you are adding to a losing position with more contracts than when you first did the trade; you are overtrading. 

If you are “winging it”; you are overtrading. If you are trading too many markets and committing 100% of your equity all the time to all those markets; you are overtrading. 

6. USING ONLY ONE TIMEFRAME FOR TRADE SELECTION

As you can see, it is my opinion that psychology is vastly more important to lasting trade success than anything else. I really believe that trader psychology is 95% or more of lasting success. Part of what shows this clearly is how traders focus on time. Every trader reading this will already have some idea of how much time is “required” for a trade to work; even if it is just a fuzzy sort-of feeling that you need to “give it time” 

I realize that this particular discussion of this particular mistake might be over a few heads at first. For those who might be saying “This is a bit much for me” I want you to try and follow along anyway. I promise to make what appears to be a difficult concept very simple to understand. 

7. FAILING TO DO YOUR HOMEWORK

Market knowledge is highly needed because a trading system or a computer cannot take into Consideration general conditions. Computer software and trading systems don’t take inTo account people’s behavior. 

As a serious trader looking to make real money trading, you can’t just plug in a black box, hit “go”, and sit back and watch the money roll in. That might work for a period of time but once conditions change or people’s behavior changes the quality of the market changes; once that happens your computerized approach will start losing money faster than you made it in all likelihood. 

8. TRADING THE NEWS

Traders who have made a lot of money and kept it will be the first to encourage you to not make this mistake; starting on your first trading day. Trading the news is one of the quickest ways to the poorhouse. 

There are no professional traders working in any trading arena that will make trades when the news comes out or change their strategy when the news comes out.  It’s important to understand a few things about the news. 

In reality, there are really only three things that can happen when a news item is released. The news item can be:

1. Better-than-expected
2. Worse-than-expected
3. About as expected

9. NOT KEEPING RECORDS OF YOUR TRADING

You need to keep accurate records of your trading because over time you are going to learn that certain things work and other things don’t. Sooner or later you will come to the conclusion that your trading system or computer analysis is only a small part of what it means to be a successful trader. 

The rest is how you personally participate and if you don’t have a record of how you participate; you can’t learn what behavior will work for you and what behavior doesn’t help you. The purpose of keeping good trading records is to help document your personal winning behavior and what your losing behavior is. Your goal with these records is to discover your trading strengths and weaknesses. 

10. TRADING FOREX WITHOUT A STOP-LOSS ORDER

It is important to constantly remind yourself that trading is a risky environment. Because it is simply not realistic to think that you will have 10 0% winning trades it is equally important to limit the risk exposure on any one trade. 

You have to let the laws of probabilities work for you and you have to control your risk to do that. When you place a trade, it is completely possible that something in the market might change and that change might take the price against you to places you personally just never expected. 

If you are still in a trade at that point, your loss is probably a significant amount of your balance. If you were trading too large, to begin with, you might be close to getting wiped out. 

Conclusion :

Being a good trader can be easy but maintaining that perfection for the long term becomes difficult. In this article, we have mentioned some common mistakes that even the top 10 Forex brokers in the world make. 

If you are willing to continue your trading career smoothly and with earning good profits, this can be the perfect article for you.