Forex is one of the ways of making money through online trading, among several other ways. The debate of forex trading vs binary options is still an ongoing topic. However, forex has been a very common trading option that is still considered tough to make money.

Many people lose a lot of their investment after forex trading. This happens as they make mistakes repeatedly. Mistakes in trading are a common thing, but some of them can be avoidable as they are very common.

Here are 12 common mistakes forex traders make.

1st Common Mistake: Having Expectations that are Unrealistic

Forex trading is tough as gaining a huge chunk of profit from your initial investment can take a lot of time. You cannot just go in somewhere and expect to shine bright on the very first few tries. You will require experience, a certain level of knowledge, and a skill set to perform well. Many traders make the mistake of expecting too much too soon.

2nd Common Mistake: Unplanned Trading

You can never make profits with just expectations. When you want to trade in the Forex market, it is a must to strategize everything. Many people make the mistake of investing in forex trading with just gut feelings and very little prior research. They fail to plan properly for the uncertain environment of the forex market. Eventually, those traders face more loss than profit.

3rd Common Mistake: Lack of Vision

There are several timeframes and charts that one should follow to trade in the forex market. If you are following only one, you are making a huge mistake. Before you invest in the forex market, you must investigate everything properly and patiently choose the proper strategy. Not having eyesight to the bigger picture can cost you heavily.

4th Common Mistake: Not Considering Exit Options

Oftentimes, people are too devoted to entering into a market that they lose sight of a proper exit strategy. This is another common mistake people make. It is important to know when to exit a market to mitigate the loss amount and maximize gain.

5th Common Mistake: No Trial and Error of the Strategy

Even if people have a proper strategy to invest in forex trading, they do not test their strategy beforehand. This can backfire even after having a strong plan to make profits from the investment. You give yourself limited ability to maximize profit when you are not running trial and error before investing.

6th Common Mistake: Going Against the Trend

The most common approach to forex trading is following the trend. Despite that, several traders still do not follow the trend and end up failing to make a profit. You can obviously follow a path that works best for you. However, you should consider changing it when things are not going your way.

7th Common Mistake: Not Acquiring Prior Knowledge

Having prior knowledge of the forex market and trading processes is extremely crucial. Here, prior knowledge means reading enough books on forex trading. There are many resources available where you can gather knowledge on the subject. Many people do not even consider doing it.

8th Common Mistake: Putting More Emphasis on the money

It is said that you make the highest profit when you forget about the money. A good trader should focus on doing all the other things correctly instead of thinking about the money all the time. This is the way of successful people. When someone fails to do that, it is a sign of making another major mistake.

9th Common Mistake: Unawareness of Currency Correlations

In the forex market, currency pairs are important things. These pairs are interlinked with one another. When people fail to realize that, they make the mistake of calculating correlations to find one another’s movement.

10th Common Mistake: Failure to Leverage

Even when you have a great strategy, failure to leverage is a great mistake. Just when they start losing money, they back away instead of trying to save themselves. This is a wrong strategy and a huge mistake of not being in the game for long enough to make profits.

11th Common Mistake: Not Focusing on the Transactions Costs

One of the most common mistakes beginner traders make is not putting emphasis on commissions. As a result, they fail to put focus on the cost of the transactions when opening their account.

12th Common Mistake: Not Considering the Long Timeframes

Timeframes in the forex market are essential as they signal the traders about daily updates. However, many traders fail to understand this as it can take long and requires patience. Neglecting long timeframes can be costly as you can lose a huge amount of money from such a mistake.

Conclusion

The 12 common mistakes forex traders make are a complete guide to what you should not do in the forex market. Many traders are already aware of all these mistakes. However, they still end up repeating the same mistakes over and over again. Therefore, it is crucial to keep them in mind before diving into the world of forex trading.