Many investors try their hand at forex – more than $5 trillion is traded this way each day – and many fail. One reason is the absence of, or the refusal to follow, a strategic trading plan. Another mistake is lack of discipline, which manifests itself through emotional responses to losses. Trial and error may work for many endeavors, but it is an expensive way to learn forex trading. Instead, it’s best to learn through a mentor relationship. Unrealistic expectations are another common failing. Too many traders swing for the fences in hopes of earning abnormally high returns.
- A successful forex trader creates and adheres to a trading plan.
- It is less expensive to learn from an experienced mentor than through trial and error.
- Forex is a marathon, not a sprint, so it’s best not to gamble on unrealistic gains.
“The largest mistake any trader can make is to let emotions control trading decisions.”