If you are a beginner in Forex, these tips are for you! We will see the most common mistakes made by beginners in the Forex market and how to avoid them.
If you’re a beginner, you must have a business plan
Not having a trading plan is one of the mistakes beginners make in Forex. A trading plan is to study the market before you start placing trades. Depending on the type of trader you are, if you are a scalper or day trader, or even a swing trader you will need to have an analysis of your market before you start placing trades. operations.
How do we recommend you make a trading plan? Pretty simple and is basically analyzing the market before starting your session. You will need to analyze the trends in the market. So, if you are a scalper you are going to find quick opportunities for 5, 15, and 30 minutes for each trade and see if the prices of the asset go up or down. Instead of placing trades against the trend, you better place trades that go with that specific trend. That will change your trading results. If you don’t create your trading plan, it’s like you are doing it blindly and you will only lose your money.
Do not overtrade!
The number two mistake we all make eventually at some point is over-trading. Over trading is, say, for example, you put in 5 trades, and you make 2 or 5%. So, then instead of stopping the trade and continuing the next day, you’re like, you know what? I can make more and go up to 10% in a day. And you start dreaming about what would happen if you can do it.
So, you keep trading and sometimes you will make money because your analysis was good and the market favors you. But most of the time you are just going to lose money. And instead of having an increase of 1% or 2% you will be having a decrease.
You can control this with the number of operations or the percentage amount, for example, if you lose 1% of your balance stop. On the contrary, if you made an increase of 2% of your balance, then you stop.
Practice on demo accounts if you are a beginner!
Mistake number three that beginners make when they start to trade Forex is not spending enough time on the demo account. What we mean by this is that when you get your trading account usually the first thing you get is a demo account. These accounts give you 1000 to 100,000 so you can practice as much as you can.
Many people don’t use these accounts because they think they are ready to jump into the real market. So, they start losing money. Practice enough with your demo account for at least 3 months. Once you are ready you can use your real account. A very important point is that you configure your demo account with the amount of money that you will also later put in your real account.
Do not expand your lot fast
Mistake number four is that many beginners want to expand their lot size too quickly. This is what we mean if you start with a micro lot, or a minute lot and you are making money by risking 2% of your balance. So, you decide to expand your account, you are making a big mistake!
If it could be possible to go from making 100 a day to making 300 a day, but it is also more likely that you will put your account at more risk. Now there is nothing wrong with climbing up, you just have to take into account the percentage of risk. Change your lot size, but don’t do it randomly. Just change it based on percentage risk.
Don’t follow signals if you don’t have knowledge
Mistake number five and this one is going to be controversial. A a lot of people follow signals or just follow alerts without any knowledge.
You can get signals but if you don’t really have knowledge, you’re going to end up losing money. No matter if it’s the best signal in the world, no matter if it’s the best app you’re not going to end up making money because of your lack of knowledge.
Conclusion
If you do not make any of the mistakes mentioned in this article, you will be a very successful trader. One of the best tips we can give you is to visit our https://blwtradingacademy.com/ and take a personal training where you can learn everything you need to know about Forex. In this way you can become an expert trader!