Everyone makes mistakes; it’s part of being human.
And traders are not the exception to being human. Though, often, the FX best traders are the ones who most resemble robots!
Even the most experienced forex traders make mistakes. Sometimes the difference between a rookie messing up and an expert messing up is that the expert knows what they did wrong.
So, there is nothing unique about having a trade not work out, or, indeed, lots of trades working out.
In fact, often the road to success is not so much in eliminating bad trades, but developing a forex strategy that compensates for or minimizes the impact of regular old human error.
The Point of a Problem is to Fix It
The whole reason to care about the most common mistakes that all forex traders can make is that, well, we can make them too. And if we know what they are, we’ll be in a better position to do something about them.
So, what are these common mistakes all traders make?
Pulling the Trigger
Let’s start with one that, well, OK, let’s be honest and say it’s rather stupid.
But, we’ve all done it, so none of us can complain: that’s rushing into a trade in the spur of the moment because just as you were deciding whether or not the trade was a good idea, the market moved and you clicked trade.
This is, obviously, a lot more common among day FX traders.
Often day traders have to make quick decisions, especially in more volatile markets. And there is a certain anxiety that comes before entering a trade.
You might enter the trade out of fear that the opportunity window is closing, or the market will suddenly move in your favor and you’ll take that as confirmation that the trade is a good idea.
Brassing It Out
Actually, there are mistakes that are more common among experienced forex traders. One of those is getting overconfident, and getting into the market without dotting the I’s and crossing the T’s.
As you get more comfortable in your forex trading, you might find yourself slacking off on the basics, and neglecting to check certain things before jumping into the market. And, often, a couple of losing trades will bring an FX trader back to earth.
Feels Over Reals
Trading is best done cold; and while it can be a lot of fun, it’s inevitable that a forex trader, at some point, will mistake feeling like it’s a good trade for thinking it’s a good trade.
True, some people just have a knack for trading, and talent is definitely a thing. But forex trading is a numbers game, whereas betting is a gut-feeling game.
The bottom line is that good FX traders are going to make lots of trades over their careers, and trading mistakes are inevitable. Having a little margin in your strategy to account for potential errors, as well as keeping safeguards is, therefore, a vital part of a successful forex trader’s toolkit.