5 Common Forex Trading Mistakes You Want to Avoid

The great thing about forex trading is that almost anyone with a computer, internet connection and a bit of extra cash can dive in. With that, though, comes those who enter without preparation. That’s when you hear their stories of failing at forex trading and give you a bad taste if thinking of entering.

Don’t let other people’s mistakes taint the potential success of forex trading. By proper preparation, you can avoid many common errors new forex traders make.

Want to start forex trading and be successful at it? Avoid the following five common mistakes many new forex traders make.

Not Stopping if You Keep Losing

A common mistake that many traders (not just forex traders) make is not stopping when they keep losing. Think about it – if you’re losing more traders than you’re winning, how do you expect to gain a profit? Unless you hit the motherload of all trades (which don’t bank on it), you’re ultimately going to lose it all.

Ideally, you want to keep your win-rate (how many trades you win on average) above 50 percent. For example, if you make 100 trades in a week and only win 30 of them, you’re win-rate would be 30 percent. That’s not very good.

Taking Too High of a Risk

If you’re trading, you need to be comfortable with a little bit of risk. For beginners, it’s not a bad idea to keep your risk level on the lower end until you develop more confidence in your skills.

Base your risk off of how much you could afford to lose without it affecting your personal finances and life. If you have a huge nest egg set aside for trading, maybe you can handle a higher risk tolerance. However, if you’re just starting with a few hundred dollars, you may want to ease up on those risky trades.

Not Doing Enough Research

A profitable trader most likely does hours of research behind the scenes. He or she spends hours going through the markets, their strategies and world news to prep for their next day of trading. Not doing any research is basically going into a trade blind.

Research also includes your broker and platform for trading. You want to have them line up with your values and what you’re trading. For example, for those trading in Switzerland, look at a BDSwiss review to see if that brokerage firm is right for you.

Winning Back a Lose

Although it’s tempting to try and win back a significant loss or go all-in on a trade, that’s an extremely risky move and a common mistake. You have your trade strategy in place for a reason. When you have those losing streak moments, stick to your plan and avoid the all-in feelings.

Not Having a Plan

With that said, not having a trading plan is another common mistake. Just winging it with your trades is never a good idea.

A trading strategy includes your risk levels and management, your selling point, when to stop and other elements that keep you on track. Spend time before you start creating a document for your trading strategy.

These five common mistakes for forex traders can help you stay clear of them and on the path of success. Although they may still happen to you, this may help you recognize them quickly and adjust your course of action.

*** SPECIAL ALERT — July 25, 2020 — TWO of this Year’s Motley Fool Stock Picks Have Already Tripled and Two have Doubled! ****

We have been tracking ALL of the Motley Fool stock picks since January 2016. That’s 4+ years, 54 months and 108 stock picks. As of Friday, July 24th 2 of their 12 2020 stocks picks have already tripled (TSLA, SHOP). In addition, 4 of their 2019, 8 of their 2018, 7 of their 2016 and 10 of their 2016 picks have also doubled. Best of all, over these 54 months, the average stock pick is up 111%. That beats the SP500 by an average of 87%. And that’s even accounting for all of this COVID mess that has wreaked havoc on some stocks but presented opportunity for other stocks. THAT is how the Fool does so well!

  • Shopify (SHOP) – April 2, 2020 pick and it is already up 163%
  • Zoom Video (ZM) – March 19, 2020 pick and it is already up 107%
  • DexCom (DXCM) picked Feb 20, 2020 right before the market crashed and it is still up 26%
  • Tesla (TSLA) picked January 2, 2020 before the crash and it is up 123% compared to the SP500 -7% so it is ahead of the market by 130%
  • HubSpot (HUBS) picked December 5, 2019 and it is up 46%
  • Netflix (NFLX) picked November 21, 2019 and it is up 42%
  • Trade Desk (TTD) picked November 11, 2019 and up 111%
  • Zoom Video originally picked Oct 3 and it is up 234%
  • SolarEdge (SEDG) picked September 19, 2019 and it is up 44%

Now, no one can guarantee that their next picks will be as strong, but our 4.5 years of experience has been super-profitable. They also claim that since inception, their average pick is up 424% and now we believe them. You sure don’t want to risk missing out. Many analysts are saying that we have passed the bottom of this COVID crisis and stocks will recover quickly. So make sure you have the best stocks in your portfolio.

Normally the Fool service is priced at $199 per year but they are currently offering it for just $99/year if you click this link.

CLICK HERE to get The Motley Fool’s Stock Picks for just $99 per Year!




GET UP TO $1,000 IN FREE STOCK

WHEN YOU OPEN A ROBINHOOD BROKERAGE ACCOUNT

Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW

(before it’s too late)