Top 10 Mistakes You Should Avoid In Forex Trading

By Ezone Constantine

Certified Financial Technician and Master Trainer 
#1: High Expectation
Many new Forex traders enter trading world with high expectations. Just imagine, you can turn Small Money into a BIG Profit within the Shortest period. Wow, Turn $50 to $5,000 within one day. Who Does Not Want That! However, that is UNREALISTIC GOALS! Due to this reasons, many Newbies end up quitting and give up easily, especially when they fail to meet their expectations. Frankly speaking, if you start with $50 or $100, a healthy expectation of your daily profits should be $1 to $5. Well it does sound small, but in term of Return on Investment, you have 1% to 5% gain. Remember, you might have losses as well. So, it's good to keep your trade with a smaller lot size. Don't rush. Instead, learn how to grow your account within 12 to 24 months. Trading is a marathon, not a sprint.
#2: Desperation and Frustration
You enter into Forex trading and hope it's going to be a quick fix solution to your money problems. That is a Big Disaster! Yes, you heard me. When you are in DESPERATE mode, you are indirectly BUILD UNHEALTHY PRESSURE. In this condition, you can't see a clear trading structure. Likely, you might end up with more losses and get even FRUSTRATED. The Forex world can be a nasty place if you don't know what you are doing. No matter what is going on in your personal life, promise yourself to be patient and not rushing. Do NOT mix your personal life with Forex trading.
#3: Ego and Pride
You might be the most successful in your career. You might be a celebrity, influencer, top athlete, top achiever, multi-millionaire, or the most outstanding person in your company. However, that DOES NOT mean you will do great immediately in Forex Trading. Did you know the real hard truth is, Mr. Market (Forex market) humble down so many prideful individuals? Yes, at the initial stage, some of them lose easily $500K to $1 Million. They won't tell you, because of their ego and pride. Sometimes, this kind of person is stubborn too. 

Read this carefully, if you want to be successful in Forex trading, THROW AWAY YOUR EGO AND STATUS QUO. Be a beginner again. Start from Zero. Humble yourself to learn and search for a mentor. Read books, attend courses, and experience the market in stages. Use the exact discipline that you use to have. Begin with a Demo Account. After you achieve consistency, then start with Live Account (Small Amount of money). Then gradually you add on. Be patient my friend. All of this takes time to build. 
#4: Gamble and Greed
If you observe the Casinos and Jackpot Lottery shop, you will discover that majority is MALE (Man) rather than FEMALE (Woman/Ladies). Man has a higher tendency to gamble and take RISK unnecessarily. What drives a person to do gambling? The answer is GREED. Did you know that MALE trader has a high tendency to blow out their account at the early stage? Man loves adrenaline rush and adventure. Once they taste a nice profit, they want more and more. This situation may lead someone to experience over-trading and lose the entire profits. 

Remember, there will be the time that you may need to stay out of the market and protect your capital. Therefore, your ability to read the market structure is very important. Besides that, proper Money Management is very crucial for any trader. As a beginner, you must learn how to handle 2% to 3% risk from your total capital. Traders under our program usually are given an excel file as part of their money management
#5: Trading with Scared Money
Trade with Scared Money can be one of the factors contributing to your unnecessary losses. Many traders forgot the Number #1 Rule in Forex Trading, "TRADE ONLY WITH MONEY THAT YOU CAN AFFORD TO LOSE". However, many newbie traders did the opposite. Some of them use their children's education funds, emergency savings, and worst, use relative's money. This condition will build High Pressure and create false FEAR in your mind. Each dollar you lose in trading can be related to painful emotions. 

Sometimes, this can lead you to exit the trade without any reason, The truth about Forex trading, is YOU WILL LOSE MONEY. However, for experienced traders, that is what we call "Calculated Risk”. Money that you can afford to lose, and you can sleep well at night. Although you might have a low risk and high reward setup, the truth is you cannot avoid losses. That is part and parcel of trading. However, as you gain experience over the years, you will gradually turn your trading into a PROFITABLE ONE. You will realize all your hard work will pay off soon. You will be able to achieve true financial independence.
#6: Mistaken Stop Loss as a Failure
At the early stage, newbies usually relate Stop Loss as a Failure. Especially when they have three losing trades consecutively, they assume that particular day is a stroke of bad luck. They feel as if they are NOT GOOD ENOUGH, or label themselves as a failure. The truth is, having a Stop Loss strategy crucial. By, implementing this strategy, you are able to MINIMIZE your risk. It is a Winning Strategy. 

Therefore, as a beginner, you must learn how to set stop loss when using chart patterns, Japanese Candlestick, Support, and Resistance or Trendlines. Each Stop Loss will be implemented differently. Newbies also must learn how to differentiate between hardcore stop-loss, break-even, and trailing stop strategy. Yes, we did cover this in our courses as well.
#7: Old Habits
Old habits are difficult to break. Ask someone who is smoking a cigarette, and tell them to quit smoking. Well, some of them are able to quit for a while, but many of them end up smoking again after 2 to 3 years. This is due to the human brain having a certain pattern, and we have the tendency to return back to our old habits. The same goes for Forex Trading. A trader can be very discipline for the first 3 to 6 months. They manage their trade with proper lot size and consistent methodology. However, traders do have a tendency to become GAMBLER again. They want the Adrenaline Rush, Beginner's Luck, Quick, and Unrealistic Profits. Because it does "FEEL GOOD!". This can result in self-sabotage, and you might wipe off your entire account in the shortest period of time. 

The only way you can stop yourself from going back to your old habit is by creating the most PAINFUL emotion towards that habit. Haha, one of my students, slap his face 3 times the moment he thought of Gambling. He creates a unique experience stopping him from going back to the old habit. So create your own style in order to refrain from going back to the old habit.
#8: Failure to Read Trends
A common mistake made by newbie traders is Failure to Establish the trend. Many traders skip the direction from a higher timeframe. Newbies just jump to the smallest timeframe (5 Minutes or 1 Minute Chart) and only think about what they can hunt right now. The FEAR OF MISSING OPPORTUNITY (FOMO) starts to kick in when the price has a sudden reaction. Sometimes, the sudden price movement is merely a trap. 

When prices move back in alignment with the Bigger Trend Movement, this is where traders lose money by trading against the trend. Remember, equip yourself at the early stage by learning how to establish the uptrend, downtrend, and sideways.
#9: Being a Perfectionist
After many years of guiding thousands of traders, I encounter some students who are perfectionists. They assume that they must learn everything first before experience the real market. Imagine someone reading the book "Swimming For Dummies". Don't get me wrong. It is good to read the book before you test the water. However, for you to have progress, you must put both your feet in the water to test the temperature. The same goes for trading, some of them are too obsessed with reading Technical Analysis Book from Chart Pattern, Japanese Candlestick, Elliot Wave, Harmonic Pattern, Ichimoku Cloud, Gann, and the list never ends. Because there are still thousands of books awaiting them. 

The learning never ends, to be frank. Good progress means while you read the book, you must learn how to navigate your trading platform, get used to the software, read charts, place an order, grow your account, and experience both winning and losses.
#10: Looking For A Short Cut
Imagine you want to have six-pack abs. But, you hate to do work out and refuse to follow the proper diet. Therefore, you search on Google "How To Get 6 Pack Abs Without Doing Any Exercise". The search result shows you still have to do some form of exercise. NO SHORTCUT. The same goes for Forex trading. Some of you are still looking for holy grails or the hidden secret of trading that can give you a 100% Winning rate. Just because you experience a total of 3 losing streaks, you assume the indicator or trading system is terrible. Therefore, you jump from one system to another. You Join countless Telegrams signals. 

Some of you even Join social Copy trade and search for auto robot trading that can guarantee you 100% ROI within a day. The truth is, there is NO HOLY GRAIL! There are NO trading systems in the world that can give you a win rate perfect 100% all the time. The only answer for you to become a consistent trader is to take action. Most important, Start It Right.
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