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In my first year of forex trading, I didn’t lose money because forex was a scam. The real reason traders lose money is because of mistakes that they do unknowingly or knowingly.
I lost money because I didn’t understand myself, risk, and patience. Let me share with you the mistakes I made in my first year of forex trading.
Studying this article will help you will discover common mistakes in forex trading that are totally avoidable and you become consistent.
Like many beginners, I came into forex expecting fast results, only to realize later that the market punishes shortcuts.
This article is not theory. These are real mistakes I personally made, and if you’re new to forex, avoiding even two of them can save you months—or years—of frustration.
1. Trading Without Understanding Risk
I used to focus on how much I could make instead of how much I could lose.
Some trades looked small, but over time they destroyed my account.
Risk per trade
You should have a minimum of 1:3 risk to reward ratio per trade because trading is probability based. If you aim at this, you will be forced for only trades that give you the requirements on your trading plan.
Why survival matters
You should learn the art of surviving long enough to win. Protect your capital jealously because from where I come from, it’s very difficult to raise capital even just $100.
Risk only 1-2% of your trade. Let the profits compound through consistency.
I assure you this is real trading now. Everything else is gambling.
2. Overtrading After Small Wins
This is one of the most common mistakes in forex trading that traders do.
One good trade made me feel confident.
Two made me feel unstoppable. That’s when I broke rules.
And this whole dopamine effect that naturally kicks in play while I was excited that I couldn’t control.
Revenge trading vs excitement trading. After every loss I felt like I should regain my money back and trust me the trades that filled I lost the more.
3. Strategy Hopping.
I changed from trading ICT concepts to Demand and supply and some other random London open strategies I could not even understand week after week thinking the problem was the strategy—not my discipline.
4.Why beginners should master ONE setup
As a trader only master one strategy and use it as a tool to pick just some money off the market consistently. I say this because every strategy however low the win rate with discipline and consistency you will make that money.
Fear, Greed, Impatience, Confidence swings
No one warned me how emotions control decisions.
These mastered me and I would dance to their tune every time. I never thought straight but out of fear, greed, FOMO and over confidence.
5. Trading Like a Full-Time Trader
Without the SkillI treated forex like a job before earning that right.
Overtrading sessions
There is another mistake of trading like there is no tomorrow. Friends this beast called over trading consumes your capital and by the time you realize the account is gone.
stick to 2 or 3 trades per day. Stick to your plan
Unrealistic expectations
Fear, Greed and impatience all results of unrealistic expectations. You see a trader showing off a benz and good life. And there you are pushing to get that lifestyle over night. That’s terrible mistake folks.
But don’t worry we all have been here and through consistency and mentorship, things changed.
Forexcastle Verdict
Forex rewards patience, not intelligence. Most of my losses came before I learned that.
plan your trades well and trade your plan well.
The first days are hard but if you can be disciplined for only a week then you can be disciplined forever.
