Forex trading is an ocean and your knowledge will be a small part of it. Hence, you cannot say any person as a master of forex trading. Almost all traders will see some losses during some sessions. Some of these losses can be consistent also. However, these traders will not become low-skilled traders because of this. You would have to take your profits without any delays or commissions in Rand. But you may have not chosen forex brokers with ZAR accounts. Likewise, forex traders are prone to mistakes even from the selection of a broker. All that matters is your ability to identify your mistakes and avoid them in your future trading sessions. If you do so, your mistakes could also become your teachers. If you ignore your faults, you will keep on repeating them until you go out of money. However, it is always better to know some of the common mistakes that are committed by your fellow traders before you start investing your money in the forex market. In this article, let us discuss a few of these forex trading mistakes in brief.
Common mistakes committed by forex traders
Overconfidence after a win
Sometimes, the accumulation of profits in few trades in a row will create overconfidence among the traders. So, some of them will invest more money in the same strategy right after the profit. However, as the trading market is changing with time, no one can say that a particular strategy will always do good for you. So, if you risk more money only because of the past profits, you may have to lose more money as well at times. Hence, you should keep your risk the same every time even after profits.
Fault in trading strategy
If you are developing a trading strategy for yourself or you are choosing an existing strategy, it is mandatory to test the working and suitability of the strategy to the market conditions. Most traders will not test the strategy and let the faults in their strategies cause losses. So, whatever strategy you may use, you should use the free demo accounts to test whether it works in the current market conditions. You should start using the strategy with real money only after the testing. It is not advisable to go with a faulty strategy.
Ignorance of long-term strategy
Some traders will choose a strategy and look at only the short-term profits. However, this method will not always work even if you have plans of closing the trade in a short span. As you would not see the long-term trend, the short-term benefit may also go nil due to the negative effects in the long term. Hence, you should go through the long-term predictions also before holding a market position.
Switching between strategies
If you are not sticking to a particular and tested strategy for your trading sessions, you will not have better results and profits. Hence, you should strictly avoid switching the trading strategies unnecessarily.