Only one forex trader in every ten that enters the forex market ever gets to take net profits from fluctuations in forex rates. The main reason why this ratio is so skewed against successful forex traders is that most forex traders either get into live trading without preparing for it or think that their natural talent will pull them through.
However, forex trading is a field that will never reward an individual who does not put in enough effort and time and makes mistakes in the market. On the other hand, traders that actually learn everything there is to learn about forex rates do not make mistakes while trading in the market.
Slipping up in the forex market would see forex rates fluctuations forge ahead of your projections and you incurring considerable losses. Therefore, if you want to gain sustained profits then you should always look to avoid making common slipups in the market. Here are some examples.
Not Being Comfortable With The Platform
Many traders think that it is not important for them to evaluate the trading platforms that they will be using. This leads to them choosing a platform arbitrarily. On the contrary, it is very important for a forex trader to ensure that he is comfortable with his chosen forex trading platform so that he can focus on analyzing the forex rates.
For instance, if you are not completely at home with your forex trading platform then you would spend a considerable amount of time navigating from one module to another, which could have been better utilised in actually analysing FX rates.
Not Taking Slippage Into Account
It is very common for new forex traders to not realise that there is something called slippage and that it can have a huge say in how much money they actually make. The reason for this is the fact that new traders almost always practise trading via demo accounts which are usually rigged to not show forex rate slippage so as to give the new trader more confidence.
Therefore, when slippage actually occurs in live accounts, the trader is perplexed at his slipup of not taking slippage into account.
Adding To Losing Trades
Another major slipup that new forex traders make is that they add more money to losing forex rates movements. This is widely considered to be something that a trader should never do because the reasons for such a move are usually emotional. Adding to losing trades can also be seen as pulling back stop loss placements so as to give the position a chance to improve their forex rates.
Not Keeping A Journal
Most forex traders are taught the importance of formulating and using a forex trading strategy for beating the fluctuating forex rates. However, traders seem to think that once they have formulated a working strategy they do not need to refine it on the basis of changing market conditions, when actually the opposite is true.
Trading strategy refinement hinges on the trader keeping a journal of all his trades so that he can assess his performance. Thus, not keeping a journal can also be seen as a major slip up.