You can learn from trying and it is useful if you know a little beforehand what mistakes you will probably make, just like any other novice trader. As long as you use a DEMO account, you do not cost anything and you do not run any risk, but once you really start trading, you would have made the next beginner mistakes several times and of course you learned that!
# 1 Too much balance
Anyone who opens a DEMO account has the tendency to start with a nice big tradi balance. Some DEMO accounts set an amount of 5000 or 10,000 euros by default. Of course too ambitious for a starting trader.
Make sure that when you create a DEMO account you start with a realistic amount in your practice account. In the article ‘Really losing money through your DEMO account, you can!’ You will read more about possible consequences, if you do not do this.
Even once you start trading with your real-money account, you would be wise not to have more money in your trade account than necessary. You have set your goals, determined your buffer and you do not need more.
# 2 Loosing profits
Many starting traders do not yet know the predictable movements of the market. They have to experience them first and in doing so, it happens regularly that they have booked the profits that they have made, look up again in smoke.
Prices fluctuate up and down. What goes up, will definitely come down again and vice versa that is no different. A course simply moves between two extreme limits and rarely crosses it. If the price reaches that limit, the trend will reverse. If you have made a profit at the time and do not take your di on time, you run the risk that you (usually very quickly) will see your profits disappear again.
# 3 Not using the stop-loss option
Inflating your account with traditions means that you suddenly see your entire account balance disappear by a rapidly rising or falling rate. You can prevent this by setting a stop-loss. Many starting traders, however, make the mistake of always shifting this stop-loss limit during a current trade. They do this in the hope that the tide will turn and the incurred loss will still be converted into profit.
Once you get started with Forex, you will soon notice that this is usually not the case or that when the price trend turns, your trades balance is now inflated.
# 4 No trade plan
Anyone who goes to trade does that for a certain purpose, usually earns something extra. How you will do that, which tools you will use and, more importantly, what exactly your objectives are, you record in a trade plan.
A trade plan contains the most important information that you will use again and again during trading. The plan tells you when you trade (and when not), how much revenue you want to achieve, what an acceptable loss is, which tools you will use and it tells something about your traditional style.
You can make such a trade plan yourself based on your personal preferences and financial possibilities. Most starters only start their trade plan when they notice that they could actually have made much more profitable trades if they had a structural plan.
# 5 Trading at the wrong time
Trading on the Forex market is a matter of waiting the right moment. The market is not always in motion and sometimes even dead quiet. At times when the market is barely in motion, nothing can be earned. But even when there is too much movement, it can be very important to place new trades.
Your trade plan helps you to determine the right entry moment. In addition, through newly acquired knowledge and insights you will know exactly in what times you just do not have to trade.
# 6 Ignoring the trend
An experienced trader will always have to follow the trend. The market is moving in waves and those who know how to discover and follow those waves will make a profit. Whoever swims against the current, is stubborn and will take more trades with a loss than with a profit.
# 7 Trade on a hunch or feeling
Not OK! In fact, if you place every trade purely on your feelings, you can better act against your feelings. Feel that the price goes up, let’s say a sell-order. That goes against your feelings, but in practice, most trades that are placed on feeling, yield huge losses.
During trading, you determine whether you place a buy order or sales order based on knowledge, experiences and current information. Here you use certain tools and your feeling is not part of that toolkit.
# 8 Not looking ahead
Follow the trend is in order, but there will come a time when the trend will return. Experienced traders look ahead and try to step in at the moment the price will turn. Instead of trading on the current course, they wait for the moment that the course will return.
Starters remain too long in the thought (or hope) that the price trend will continue. In doing so, they are usually completely overtaken when such a trend change is applied.
# 9 Too impatient
Starters often go after a day or two to work with a real-money account and that is completely fine! There is nothing wrong with that, as long as they realize that a lot needs to be learned.
Sensible starters thus open both a DEMO account and a real-money account and keep the bet on the last account very minimal and the stop-loss extremely tight. That will probably lead to a first investment being completely lost and who does not want to see it as a learning allowance, should not start Forex!
# 9 Fear of missing opportunities
Starters are keen to step in when a good chance occurs. What they do not know is that they are often too late (lacking knowledge and insights).
Experienced traders do not wait for good opportunities, but at a good time. They know the market and can estimate well when a likely price decrease or increase will occur.
# 10 Not increasing their leverage
Many traders do not yet understand the influence of leverage on trading. The buffer they have is often too large or too tight to actually achieve their goals (if they have already established them).
Experienced traders have sufficient trades balance and a responsible buffer to absorb losses and anticipate expected changes in course.
Trading is easy when you know what to do
However, it takes a while before you are ready. If you have already started trading, you will certainly recognize some typical beginner mistakes. If you still make these mistakes and you have no idea how to change that, follow our Online Forex Training.