fbpx

PU Prime App

Exclusive deals on mobile

  • Trading Knowledge  >  Trading Blog

12 January 2022,07:50

Trading Blog

The 5 Most Common Mistakes Made By Beginner Forex Traders

12 January 2022, 07:50

Share on:
FacebookLinkedInTwitterShare
Share on:
FacebookLinkedInTwitterShare

Most forex traders who are starting to trade are bound to make mistakes. We all made them. Here are 5 common mistakes made by a beginner forex trader

Trading Forex Without Much Knowledge

As with any endeavour, being prepared is key to success. One of the most common mistakes made by beginner forex traders is trying to succeed without sufficient understanding or knowledge about the Forex market. Before entering a forex trade, make sure to do enough research and understand how things work. Not only should you be up to date with the latest trends and events in the market, but you should also have a perfect idea and forecast of how these events could influence the market.

Thankfully, there are plenty of resources online, like PU Prime’s own trading tutorials and webinars, that can help you get started. Take the time to understand the lingo, workings, and strategies for forex trading; and try your hand at a demo account before embarking on trading.

forex Trading is a skill and like any other skill, it takes time and a lot of practice before becoming a pro. Consult a professional and investing in a trading education course is definitely advisable.

Not Having A Thought Out Plan

Because forex traders are trying to grasp as many trading opportunities as possible. Most of them tend to neglect or forget what they were set out to do. 

To have a forex trading plan is to have a comprehensive framework that guides your decision making in any difficult trading activity. While a beginner might luck out by trading on instinct and whims, occurrences like that are rare. Having a clearly defined plan with proper entry and exit conditions is important to trading with confidence, and avoiding making emotional decisions. At the same time, be flexible enough to react as the market situation changes – if a trading strategy is not working out, then perhaps it’s time to move on to something else.

Letting Trading Emotions Impact Decisions

One of the most common mistakes made by beginner forex traders is letting personal feelings and emotions, also known as trading emotions, impact their decision-making. Trading emotions are definitely detrimental as it would affect forex traders’ ability to think and make decisions quickly. It could also lead them making impulsive decisions out of fear, greed or bias. 

On how to control these trading emotions, it is important for forex traders to exercise a calm demeanor when trading forex and having the discipline to stick to the stop-losses and profit-taking of your trading plan. Discipline is indeed the most important attribute to cultivate, especially in a scenario where greed or bias can often obscure the larger picture. Holding on to losses for too long in the hopes that trends might reverse might result in losing even more of your capital. No forex trading strategy works 100% of the time, treat it as a life lesson and move on.

Part of discipline is also only taking risks that one can afford. Allocating a consistent, fractional amount of capital on each trade will prevent emotional or “gut feeling” decisions like taking on an abnormally large position because you feel positive after a string of wins.

Finally, put in the work. Putting in the effort to follow the news and events; record your activity and review your trades (MT4 has a pretty useful tool to do just that); and doing backtesting with your forex strategy can all have a significant impact on your trades.

Thinking That The “Ultimate” Forex Trading Strategy Exist

Even just having a forex trading strategy is not enough. Some beginner forex traders will constantly chase for the perfect trading strategy that they think will make them large amounts of money. No such thing exists – not for the institutions, and certainly not for the retail trader. Instead, pick one that suits your personality and available resources. This includes how much risk you are able to assume, the amount of capital you have, and how much attention you can spare to monitor your trades.

At times when forex traders are lost and unsure of what to do, instead of relying on the “ultimate” trading strategy for answers, forex traders should also learn to independently seek a deeper understanding of what’s going on and why it happens.

Having Unrealistic Expectations While Trading Forex

There’s no free lunch in the world. As a beginner forex trader, the potential returns from volatility, like during the announcement of high-impact news, might seem tempting. But volatility means that the forex market might move either way. Avoid trading forex during or right before these announcements like central bank meetings or employment reports. Instead, monitor the situation and wait until the situation calms down a little. forex trading is not a way to make quick and easy money consistently (nothing is). Like running a business, it’s something that requires work, patience and practice in order to have a payoff.

Are You Ready To Start Your Forex Trading Journey?

把握优势,开始交易

以行业低点差和闪电般的执行速度交易外汇、指数、贵金属等。

  • 在我们的Standard账户上以最低50美元的入金金额开始交易。
  • 获得全天候支持。
  • 获取数百种交易工具、免费教学器材和最佳的优惠活动。
立即加入

Latest Posts

简单快速的
开设账户

开设真实账户
  • 1

    即刻申请

    通过无障碍程序注册

    PU Prime

    真实账户

  • 2

    轻松入金

    通过多种渠道及可接受的货币轻松地为您的账户入金

  • 3

    开始交易

    在市场领先的交易条件下,交易数百种产品

Please note the Website is intended for individuals residing in jurisdictions where accessing the Website is permitted by law.

Please note that PU Prime and its affiliated entities are neither established nor operating in your home jurisdiction.

By clicking the "Acknowledge" button, you confirm that you are entering this website solely based on your initiative and not as a result of any specific marketing outreach. You wish to obtain information from this website which is provided on reverse solicitation in accordance with the laws of your home jurisdiction.

Thank You for Your Acknowledgement!

Ten en cuenta que el sitio web está destinado a personas que residen en jurisdicciones donde el acceso al sitio web está permitido por la ley.

Ten en cuenta que PU Prime y sus entidades afiliadas no están establecidas ni operan en tu jurisdicción de origen.

Al hacer clic en el botón "Aceptar", confirmas que estás ingresando a este sitio web por tu propia iniciativa y no como resultado de ningún esfuerzo de marketing específico. Deseas obtener información de este sitio web que se proporciona mediante solicitud inversa de acuerdo con las leyes de tu jurisdicción de origen.

Thank You for Your Acknowledgement!