When you start trading on the forex market there are a couple of mistakes that you must avoid. Below are the most common mistakes that occur in forex trading.
1. To much leverage
One of the best advantages of the forex trading is the posibility of using the leverage. One of the most common mistake the trades do is that they use to much leverage. Using to much leverage means that you make a big transaction when you have to little money in the account. If the market moves a little against your position that could result in a big loss for you.
In general a beginner forex trader get’s inveolved emotionaly and will get angry and probably close his position/positions with a big loss.
2. Overtrading – To many trasactions
Overtrading appears when the trader tries to find opportunuties that are not actually there. It happens very often to the beginners because they just want to trade (forgeting about the goal of trading – profit). Usually the result is a trade made bad that can finish with losses. Overtrading can also result from opening to many trades at one time, and using to much leverage.
3. Picking tops and bottoms
Many beginner traders try to pick the exact top and/or from where the price will go in the opposite direction. This thing is difficult even for experienced trades.