Forex traders usually make mistakes when they are experiencing some kind of anxiety, when they are not calm and not in the state to think rationally. However, sometimes mistakes can be made even unconsciously, without you even knowing that you are making them. As a Forex trader, it is worth understanding and acknowledging mistakes that many other Forex traders make, so that you can stand more of a chance of avoiding making these mistakes yourself.
One common mistake made by many Forex traders, is the use of vague Forex trading plans that do not actually benefit their users at all. A Forex trading plan is supposed to clear and concise, but also specific with actual rules to follow. If your plan does have these qualities, it is probably not doing you any good. Also, having a plan is one thing, but actually following the plan is another. Many Forex traders do in fact write up acceptable plans but do not actually follow them, rendering them pretty much pointless. First carefully write up a plan and then follow it.
What is also relevant on the subject of Forex trading tactics, is the use of the infamous stop-loss. If you do not set a stop-loss on your trades, you could well let your losses run you right into the ground, so to speak. Stops prevent your losses from destroying all of your capital in your account. The key in Forex trading is to cut your losses and maximize your profits. If you do not take care of your losses, they will eat you alive. Make sure to always mark a stop-loss when placing trades, no matter how good you think an opportunity is.
Sometimes obsessiveness is good. Sometimes you can call it passion or dedication or even both, but other times it is just plain obsessiveness. If you lose a trade, do not get obsessed over the loss you draw, because losses are inevitable. If you start getting worked up and letting your emotions take hold, you will only end up accumulating more losses. In this sense, losses can be self-fulfilling, but only if you let your emotions get the better of you. This is a mistake that kills a lot of Forex trading careers. Remember to always trade calmly and rationally. Success will come to you in time. Always be patient.
Dream big. Think big. However, do not let your ambitions affect your Forex trading behaviors. What this means is, be ambitious but do not let your long-term goals affect your short-term composure. If your goal is to make a billion, you do not want to be thinking about a billion while you are looking to place your first trade. It is much too daunting to think about a billion units of any major currency when you are just starting out. Even if you have been trading for a while, try to break down your ultimate, long-term goal into smaller chunks. For example, first focus on making your first 10 USD, before focusing on making your first 100 USD and so on. Keep your end goal in mind, but make sure you have short-term goals in mind too. Many Forex traders burn out over time due to unrealistic expectations and poor goal management. Goals are great motivators, but they can also kill your profits if they are not well thought out.
In conclusion, there many common mistakes that many Forex traders make, including having poor Forex trading plans, letting their emotions take hold and not managing their goals effectively. Of course there are many other mistakes that Forex traders make, but each mistake can relate to fundamental concepts like work ethic, discipline and professionalism. Be the best you can, always look to educate yourself more and more, practice regularly and always try to improve on everything. Success is a slow process, but it comes to those who work hard for it.