Errors that Forex Traders Make and How to Avoid Them! (Series 1).

Remember the popular folklore where the elephant was fooled into believing he'll become king? To celebrate his "coronation", he was even made to catwalk and dance on a supposed "red carpet", not knowing that a pitfall was right underneath!

In Forex trading, your number one goal is to earn profits. Of course! We know profits are important and we share the same ideology too!

However, it is crucial that you do not get carried away or overly fixated on "profit goals" that you completely lose guard and fall victim to the various pitfalls and avoidable errors in Forex trading.

Some of these errors are familiar and I am dead sure that you've either looked them eyeball to eyeball and proudly brandished your shiny sword of trading experience at them, or danced meritoriously on the red carpet just like the elephant, and errhm... Never mind! laughing

The saying "You don't die twice from the same death" was coined for a fantastic reason; by being armed with the knowledge of the various errors and pitfalls encountered in Forex trading, avoiding them becomes really easy.

Therefore, to become a successful Forex trader, the following mistakes should be avoided:

1. Choosing a Wrong Forex Broker

This is the "Oga Patapata" of them all! Transacting with a poor Forex Broker is a guaranteed freefall to failure.

Selecting a Forex Broker requires just about the same effort as hunting for a life partner, if not more. One wrong move, and it's doomsday!

Take your time to examine the broker's execution speed, charges system, ease of deposits and withdrawal, customer support, and of course, the number of available trading instruments.

The more instruments offered, the greater the opportunities to make more profits, remember?

Unsure of how to begin? These factors will help you to make the best choice.

 

2. Trading with Zero Plans

Imagine that Ferdinand Magellan had no map or plan whatsoever; he wouldn't become known in the history of Geography as a circumnavigator.

A plan is the first step to achieving success in life. Lack it, and it's all guesses, gambling and Brownian motion all the way!

Your trading plan breaks down everything into simple bits and helps to outline your strategy - from what, how and when to trade, up to the markets you will trade, the time and timeframe to analyse and trade with.

That being said, it's safe to say that a trader without a trading plan is a gambler!

Creating a plan and executing it takes considerable time, energy, and a lot of trials and errors, and to make things easy, you might want to check these tips.

 

3. Risking More Than You Can Afford to Lose

Just as you're pining for profits, it is equally important that you have a set proportion of your trading capital that you don't mind losing should things go South.

You may set your stop loss to close at a 1% loss, for example. This way, just a little portion of your capital will be lost if you're having a really bad day.

This will help you achieve discipline, as day trading can be very addictive. Therefore, ensure to only trade with the money you have set aside, and stick to your strategy.

 

Oh dear, it's time to hit the brakes, lest I overload you with way too much information. The errors committed by Forex Traders be like wahala, e no dey finish!

Based on your journey in the Forex market so far, what are other errors experienced by Forex traders? Go ahead and drop a comment below, I'll love to learn from you.

Thanks for reading along with me to the very end. Click here for Series 2!

 

P.S. Make sure you're not dancing on the red carpet! wink