You also need to be psychologically prepared for forex trading. Emotions such as fear, euphoria, excitement can push a trader to rash actions and help lose money.
Common forex trading mistakes include overleveraging, which can lead to significant losses if the market moves against you, and failing to implement proper risk management, such as using stop-loss orders. Emotional trading—letting fear or greed drive decisions—often results in poor judgment and increased risk.
New traders being unaware of the market conditions should keep the leverage low in start and may increase it overtime.
You also need to be able to correctly and especially choose pairs for trading according to your knowledge and experience. That is, for example, it is better for beginners not to trade pairs with huge volatility, such as gold. Here you can quickly earn money, and quickly lose all your investments. For such novice traders, smoother and less volatile pairs are more suitable, such as EURUSD, which also has the lowest spreads (my broker fxopen has a spread of only 0.1-0.2). This will also allow you to limit risks when trading and be less nervous about frequent large and unpredictable movements, such as highly volatile pairs.
Good point on starting with less volatile pairs! How do you know when to move to more volatile pairs, and what risk management tips do you have?
I trade EURUSD more often. But I also use USDJPY in trading, which I like for its extensive trend movements, which also gives the opportunity to earn good money.
I think only your personal experience will show you when you can trade more volatile pairs. For me, each pair is unique, with its own types of movements (for example, some pairs like to move in ranges often, other pairs have more pronounced trend movements), so each trader must determine for himself which pairs are more convenient for him to trade according to his strategy and psychology. And I control risks by means of stop losses and adequate lots according to the size of my deposit.
Glad you’re enjoying the journey! Early mistakes I’d avoid: trading without a plan, over-leveraging, and chasing losses. Advice for beginners: master risk management, start small, and focus on learning rather than quick profits. Patience and discipline are your greatest allies.
Glad you’re enjoying the journey! Early mistakes I’d avoid: trading without a plan, over-leveraging, and chasing losses. Advice for beginners: master risk management, start small, and focus on learning rather than quick profits. Patience and discipline are your greatest allies.