While the Forex market offers many advantages to traders, details that are not taken into account or ignored may return to the traders as a loss. These are the mistakes that Forex traders make the most;
1- Making High-Volume Trades: Leveraged trades require a different risk perception compared to spot markets. The proportional difference (leverage) between the investors’ trade size and their principal is something they should definitely consider. Taking a position using all or most of the capital in the Forex market may cause the Forex traders to lose their capital in a short time.
2- Not Determining Take Profit and Stop Loss Levels: As it should be, if the traders are acting within a strategy, they have a target price when they enter the position, and they should have determined with the take profit and stop-loss orders at what price our position will be closed if the risk materializes, and how much loss they will incur. Otherwise, the loss will be inevitable.
3- Carrying a Loss Position for a Long Time: If traders do not predetermine the level at which they will exit the losing position and if we carry our losses for a long time with the expectation that the market will turn in our favor, our capital may erode to a large extent.
4- Making Emotional Decisions: Without exception, all decisions are expected to be free of emotions for a trader, and always the hardest part of the job is to make decisions isolated from emotions. Investors will be successful to the extent that they can maximize this.
5- Trading for the Sake of Having Done: Trading in financial markets is a serious business that requires attention. Rational Forex traders realize that frivolous transactions will not yield steady returns.
6- Trading Without Gaining Experience: Starting transactions with trial accounts without creating a profitable strategy can be the most costly way to learn how to trade.
7- Acting Without a Plan: It is assumed that all movements in the market are irrational. One of the important requirements of not losing in such an environment is to have a plan.
8- Not Sticking to the Stop Level: If investors are changing the stop level because they are afraid of facing a growing loss, this may be a harbinger of a bigger loss.
9- Acting Independently of the Strategy Established: The most important part of a strategy is a loyal practitioner.
10- Trading with a Large Amount and Frequently: Trading with a high amount causes the Forex traders to carry great risk, and trading frequently can be tiring and stressful.
11- Acting with Senses: If traders enter the position only with sensations, they are likely to be mistaken. It is necessary to enter the position with rational decisions.
12- Opening a Position with Insufficient Information: If investors think that they do not have enough information, they should practice for a while, and follow the market will help them.
13- Overconfidence: Investor’s self-confidence is desirable, but overconfidence causes them to not analyze their mistakes and admit that they may be wrong.
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