7 deadly mistakes beginners make on Forex

Ali Eccu
Ali Eccu
Sep 6, 2018 · 3 min read

Forex trading is a complicated, but exciting business that can become a source of good income. At the same time, many people lose money, become disappointed and abandon this business. Why is this happening?

The more difficult an activity is, the more chances for mistake you have — it’s natural. There is a lot of educating literature, articles, videos, etc. Brokers, such as GoCapitalFX, provide the opportunity to use training accounts. But in practice, fresh investors make the same mistakes.

  1. Emotionality — the root of all evil. Work in the markets requires coolness and rationality. However, not everyone is able to watch calmly how their deposit is vanishing. Here a huge wave overtakes the beginner: a panic, chaotic attempts to do something — this only aggravates the situation. Emotional issues are affecting all trader’s decisions, and make them do more mistakes.
  2. Absence of a system. In order to reduce this problem, there is a wide range of ​​tools. Terminals, which are provided by almost all brokers, GoCapitalFX including, help to systematize trading. A clear trading system is the basis of success, it is true in other spheres of life, as well. When you come to the gym, you do not wing it, do you?
  3. Expecting an untold wealth — and immediately! Be realistic. Your income directly depends on experience, knowledge, and the volume of the deposit. It is realistic to get about 70–100% profit per year.
  4. Shallow understanding of the basic trading principles. Some, having read couple books on trading and having watched several videos on the YouTube, immediately dive headlong into currency speculation. It does not work like this. You should spend a lot of time and effort on self-education. Practice on a demo account that can be opened with GoCapitalFX or another brokerage company, will help, too.
  5. Being over enthusiastic. This is the case when you want to try everything, make all the money in the world, open all transactions, more deals, more, more! Stop it. Even if you use advisors and automated strategies that are provided on platforms like MT4 (again, GoCapitalFX provides it to all customers), you should try to delve into what is happening. Each transaction must be reasonable, there should not be more than you can control.
  6. Too much trust. Analysts have their own opinion, and you must have your own one. Sure thing, this is not easy at first. You have to listen to advice, but do not follow blindly. Although brokerage companies, like the same GoCapitalFX, often provide good analytics — it helps a lot in trader’s work. But the responsibility for decisions is always yours, keep it in mind.
  7. Financial incompetence. It’s not about you. You are not that person who invests their last money in Forex, or, even more, takes bank credit for this. Also there are people (I’ve never met personally, but I’ve read about them), who leave work or school after they have earned their first hundred dollars. That is something very opposite to successful approach.
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