Are You Making These Mistakes In Your Forex Trading?

Trading can be really frustrating when you lose money, knowing full well you didn’t have to.

Often times we get stuck in situations that were preventable and we tend to repeat the same mistakes.

Being aware of these mistakes and searching for solutions in your trading is the best way to combat the recurring losses we can experience.

Are You Making These Mistakes in Your Trading?

When I’m coaching or working with traders there tends to be three major mistakes I see being made on a consistent basis:

1. Letting Losing Trades Run
2. Not Having a Complete Trading System
3. Trading With Too Much Risk

I want to address each of these three mistakes specifically, so we can work through solutions that you can use to remedy them.

1. Letting Losing Trades Run

This is probably the most common mistake I see on a day to day basis in trading.

You may be thinking to yourself that this is a simple problem to fix.

In theory you’re right, you just don’t let losing trades run against you.

In reality it’s not so simple.

The issue you’re facing is not the simplicity of the problem, but the complexity of human psychology and emotion.

There is something innate about the human spirit that wants to see the under dog win. It wants to see losers turn into winners.

When we trade, we’re at war with our own mind and emotions.

This is really the underlying problem we are trying to fix is that battle versus our own human nature.

So how do we overcome this issue and face our demons?

You’ve probably heard the advice that we should try to eliminate your emotions and try to trade as “robotic” in nature as possible. I used to think this was sound advice since it is often touted by a lot of current past gurus.

The longer I’ve traded the more I’ve come to realize how terrible this advice is.

The goal should be to be able to understand yourself well enough to be able to identify when you are thinking about putting yourself into that situation. Then, and only then, will you be able to consistently and healthily deal with your psychology and emotions to avoid holding onto losers.

2. Not Having A Complete Trading System

This problem is a little more strait forward, but is often not thought all the way through.

For some reason traders have the audacity to think that all they need is a simple trading strategy and they’re going to make a billion dollars.

They believe this in spite of the masses that have failed to do so before them.

My hope is that traders just haven’t sat down to actually mentally workout what a trading system is, or how to assemble one.

If you want to be a successful trader, a trading strategy is not enough.

You need to build a complete system.

You may be wondering, “what do you need for a complete trading system?”

I’m glad you asked!

The way I teach it, you need the following as a bare minimum for a complete trading system:

• A Trading Strategy
• A Risk Strategy
• A Risk Mitigation Strategy (what to do when your risk goes awry)
• A Way To Track Data So You Can Improve

If you have these things laid out, you have the framework of a trading system that you can continue to test and to tweak to your liking.

I understand that assembling this, and formally putting it all together is a lot of work. That may be the reason why so many people don’t bother to do it at all.

If you put in the time to do this work before putting your hard earned money at risk, it will make a huge impact in your Trading.

3. Trading With Too Much Risk

This is another one of the issues where we have to have a hard look in the mirror.

If you’ve followed me for very long you’ve probably heard me say, “We are our strongest asset and liability.”

I’ve found that when people struggle with this issue, they struggle with one of three things:

1. They can’t do Math or don’t understand it
2. They’re trying to get rick quick
3. Weak Psychology

Number 1 is easy to fix, the math is pretty straight forward and is basic arithmetic.

Which leads me to believe that number 2 and 3 are really the major issues.

If you struggle with the motive of trying to get rich quick, you’re going to fail no matter what the arena is.

That may be a bit blunt, but I think it needs to be.

I don’t understand why a person would not be willing to spend some time learning a skill set that can pay them for the rest of their lives.

There is no person out there that can pick up a basketball for the first time tomorrow, and a month from now be playing in the NBA. Why would you expect any different in the professional arena of trading? If you follow the story of any professional athlete you will see that they spent years practicing their skill sets, starting with and mastering the fundamentals and basics first.

The level of arrogance that it takes to think that you’re going to start trading after 1 week of learning and be a professional is astounding.

The other issues with this way of thinking is that you already have the wrong goal and mindset.

This ties into problem number 3 with a weak psychology.

What you don’t realize is that if you’ve reached this point that you are taking too much risk, you’ve convinced yourself you need to make money fast.

If that is how you think, you’ve already lost the battle.

You need to love the process, love the journey!

If you can shift your psychology to that mind set, you are going to achieve better results exponentially faster.

Work on progressing. Work on building. Work on Mastering the craft.

There is a great book on trading psychology that I’ve talked about here

That is how you can avoid making these mistakes in your Forex Trading.

I hope you’ve found this post insightful and you now have some practical solutions to attack these issues if they’re present in you’re trading.

It would mean the world to me if you would share this post with someone who needs to hear it!

My goal is to positively impact the lives of as many traders as I can across the globe, but I need your help to do it!

If I can help you in any way don’t hesitate to reach out

You can always find me here in my free trading room