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What is the biggest mistake first-time Forex traders make?

December 6, 2022

Without a doubt, currency trading worldwide moves millions and millions of dollars every day, different investors who are passionate about trading enter into these movements, however, it is no secret to anyone that most forex traders lose more money than they make even though they win more than 50% of the trades. This is because traders do not use stops and limits to enforce the 1:1 risk/reward action.

One of the largest movements in currency trading is that of the US dollar against the euro, this among other currencies has made currency trading more popular every day, gaining more followers every day, however, the income of newbies has also been overshadowed by the departure of some operators who had been exchanging currencies for several years.

What do first-time and intermediate forex traders do wrong?

It can be said that each currency trader obtains different experiences, and investment analysis plays a determining factor when it comes to making or losing money, in fact, there are different currency pairs that novice investors like thanks to their popularity There are different brokers, however, most of them feel very comfortable in the FX broker where they are correct up to 50% of the time.

If we verify the histories we can see that there are more than 12,000,000 transactions made by real investors or by the different stockbrokers available, among these operations 15 currency pairs stand out, which are preferred by traders. Among these operations we can see that more than 60% of the currency trading operations are won by investors, however, it is also evident that most of these are in losses with each of their accounts, which makes us think; What are investors doing wrong?

It is easy after doing an analysis of the statistics found in the different brokers we can see how the money invested in losing trades is larger than that invested in winning trades and this reflects that investors have not defined a plan of trading that allows them to ensure results and obtain profits from the different brokers.

We are going to use the EUR/USD currency as an example, it can be seen that 59.8% of the operations were winners, however, it is observed that the losses of the operators of the pair were larger than the winners, evidencing total losses 127 pis, total profits 69 pips, that is to say, that the losses almost double the profits of the investors.

Do not get carried away by emotions and do not make different amounts, remember that you must respect a trading plan

Normally the big investors and trading books that exist give this advice to investors, if the operations go against you, close it and wait for a better point to enter, on the contrary, if an operation is in profit, do not be afraid and allow it to run so you can get a good return on that investment.

Although these words may seem very simple, they basically say eliminate what goes against you and hold on to what is good for you, these words go against the nature of humans, most of the time we cling to what we lose hoping that things will change for the better, however, most of the time they don’t.

To close these tips that we must take into account before entering the world of buying and selling currencies, we advise you to first have an established trading plan, carry out the different experiments in the demo accounts of the different brokers and when we have a real profitable strategy go to the real account, I assure you that this will reduce losses and maximize profits.