5 Mistakes Forex Beginners Make When They First Start Trading

Did you know that close to 80% of Beginning Forex Traders Blow their entire account within the first few months, and some even within the first few weeks?

Why? They’re making HUGE mistakes that are easily avoidable because they lack the experience, knowledge, and education of a pro trader. They’re making mistakes that could essentially be avoided all-together .

With that said, is it possible to Become a Professional Foreign Currencies Trader Fast? If you avoid these mistakes and stay disciplined, almost immediately, you can be considered a pro Forex trader; because Forex is an Odds and numbers game, not a “Big Wins” game. Let’s cover these Account threatening mistakes, shall we?

Mistake 1: Trading a Live Account Before You’re Prepared

Entire volumes have been written on the topic of preparation. Would you ever vote for a politician without a plan? Would you play in a sports game without practicing and getting a feel for the sport first? Would you ever just willy-nilly stroll into parenthood without a plan? Most folks do and I’m telling you it’s a recipe for disaster and tough lessons learned.

Practice and preparation are crucial to learning anything, from sports to trading. They say the game is won on the practice field. You don’t need to lose all of your money to learn like most people wrongly assume. You can lose monopoly money first and learn BEFORE you go live.

Start with a demo account, prepare there for weeks or months until you finally feel confident enough to start trading a live account with your money.

Mistake 2: Poor Risk Management

I cannot stress this point enough, Risk Management is quite possibly the most Important discipline you could ever carry with you into your trading career.

Accept it and you win long term, deny it and your career will be denied

Without proper risk management, you’re literally gambling. You might as well just empty your entire bank account, waltz right into the casino and hand the entire load over to your dealer because neglecting this one is just as bad.

Investopedia describes risk management like this:

“Risk management helps cut down losses. It can also help protect a trader’s account from losing all of his or her money. The risk occurs when the trader suffers a loss. If it can be managed, the trader can open him or herself up to making money in the market.”

“There is no success whithout taking risks”

What does proper risk management look like?

Looking for trade set-ups that offer at least a 2 to 1 win ratio or better. I won’t dive into details on that process as there are many courses and trainers that have full-scale tutorials on the topic but to put it bluntly, you need to stack the cards in your favor every time you take a trade and not the other way around.

Mistake 3: Overly Confident

Confidence misplaced breeds greed. Greed gets a Forex Trader killed.

In the financial markets, if anyone gets a bit too high and mighty, they will get humbled. The markets have an uncanny way off bringing people back down to earth. Entire empires have been toppled and billionaires have been beaten to a pulp and lost everything because of a few poor decisions. What would make you think you’re any smarter or better than them?

The answer is, you aren’t, so don’t act like you are. Instead make choices based in humility, math, and proper risk management. It’s the only surefire way to make money over the long term in the Forex Markets.

One day I was at a local Street event where the streets were closed downtown and there were tons of booths and vendors when I noticed a big group of people surrounding a man hanging from a metal bar that closely resembled a pull-up bar.

I asked and quickly found out this was a game, You pay 10 dollars to enter and you get 100 bucks if you can hang on the bar for 90 seconds. It seemed simple enough and enticed the majority of beefcake guys who regularly hit the gym.

Again and again, guy after guy failed and lost their money, when they went in thinking they would easily win 100 bucks, those suckers. Why? The bar wasn’t designed for anyone to win and rarely did people win. the bar was placed inside of two lubricated bearings that spun the bar when there was weight on it so its actually extremely difficult to hold onto for 1 minute, much less 3.

Like 1 in every 50. So they would make 400 bucks for every 50 guys that tried. Why did people pay to play? Some people just wanted to try the new game; Some people thought that going to the gym for 2 weeks made them Conor McGregor; Some others were good, but not enough to complete the challenge. The same is true of Forex Trading, especially if you’re a beginner, don’t get too cocky or confident, the game isn’t typically designed for you to win so don’t play their game, play yours.

Mistake 4: Choosing The Wrong Broker

Not every broker is your friend, just like not every stranger is. Just like mommy and daddy said, don’t ever hop into the van with a stranger. So why would you trust a stranger (usually in a different country) with your money?

Not everyone can be trusted and in the financial markets even less so. I learned this lesson the hard way after a few blown accounts with untrustworthy brokers. I thought I’d made poor trading decisions which made it my faulty. Then, later on, I found out that these brokers weren’t exactly trustworthy and had poor track records from personal friends in the space. I’ve actually had friends who funded their account with a specific broker that just disappeared one day and took off with their money, never to be found again.

“Trading is not about picking the market’s direction, but about great executiopn”

It happens, so you need to be careful, I always recommend you do an extensive background search on the broker, google them, look up reviews, ask other people and find out more about the folks running them. Do they have a Link’d In Page? Criminal backgrounds? Good history? it’ll pay you, in the long run, to do a bit of homework before funding with a broker.

If you want my recommendation for a broker that I’ve even used for a while now that’s actually trustworthy and safe, then you can click here for more info. Also, that is my affiliate link so I get a small commission for referring you because I’ve developed a relationship with them, but I want to be completely transparent if you don’t feel comfortable with that then, either way, I recommend you find one that you are comfortable with.

Mistake 5: Trading Without a Plan

The last and final major mistake beginning forex traders make which keeps them stuck and blowing accounts is that they trade without a plan and goals.

They make mistakes because they’re blown wherever the wind takes them and stand on a weak and brittle foundation. A plan provides a set of rules for you to follow, it gives you a strong foundation when the winds blow and the storms stir and the markets seem to be extra volatile. It allows you to enter and exit trades ONLY when it’s within your plan. It removes all emotions of fear or FOMO from the equation so you can think less and just operate more like a machine, one that makes more money than it loses.

“Before you invest in something, invest in time to understand it.”

Because at the end of the day, we’re all here to make money and we simply can’t do that as Forex Traders without sticking to a plan.

So, if you enjoyed this article and video and want more in-depth training on Forex, CLICK HERE to download my book, In The Money: Million Dollar Forex Trading Secrets From a High School Dropout An “insider” Short-Guide to Becoming a ProForex Trader EVEN if You’re a Complete Newbie