1. You Need a Mentor
The main reason why you’ll never make money in Forex is that you will try and accomplish successful trading solo, even though you need a mentor. That is the biggest reason why you won’t make any money. Imagine teaching yourself how to become a pilot through trial and error without any formal training or mentor. You will end up crashing your first plane on the first day.
You need someone who made lots of money with Forex, not just someone who claims on Youtube, Instagram or Facebook to know how to trade.
The first thing that you need to do is to find someone in the Forex industry. It can be someone who you look up to, you need to like their lifestyle, the values that they live by and the characteristics that they have. You want to find someone that you can call a role model and then make them into your mentor.
People in Forex, they go into the industry, find a broker and then they fund their account and just start trading. That is the number one mistake people make when it comes to Forex trading.
You need to learn how to look at people who’ve already accomplished something. The best way to ask for directions is to ask someone who’s already been where you want to go.
2. Depending Too Much on Forex Signals
There are some of the best, most powerful Forex signals that people send out. Signals are made from deep analysis of the market, views what is happening on a daily basis and people actually pay about thirty-nine dollars to subscribe that VIP signals.
Anyways, when people find a mentor but won’t attend a class or a course, that is a big mistake. You have to attend some sort of formal educational training when it comes to Forex training before you actually spend real money.
What you need to do is actually use the Forex signals as a guideline on when to trade not necessarily to depend 100% on the Forex trading signals. Because a lot of people receive Forex signals from a mentor, a company or a website, but they don’t actually know why that website or that mentor is trading that currency or trading at that particular time. They don’t really understand what is the reason behind that trading. They just want to use that opportunity to get the signals to sell or buy.
And then they get surprised why some people in the signals group make money and they are losing money. The reason is simple, you don’t know why you are trading that currency peg. Even though you are subscribed to someone who actually knows what they are doing, you might be going in at the wrong time or you might be going in with the wrong block size.
3. A Lot Size Which Is Too Big or Too Small
Remember, every time you start a trade on the Forex market, you get to chose how much leverage as the amount of additional equity that a broker can lend you in order to place the trade.
So, you can choose a lot size of 1,10,5,20, and those are a lot sizes that beginner traders tend to use, and which are totally wrong. The average lot size that a beginner trader should use is around 0.02, 0.03 or 0.05.
If you are using a lot size somewhere in between 1 to 10 as a beginner, you are going to lose your money. Most beginners don’t start off with a $10,000 account, or $5,000, they start off with $100 to $500 accounts. So if you’re going to use a big lot size, you can expose your account with too much leverage, therefore if you lose the trade, you will lose if not all of your money, a half or 25%. So make sure you are using an adequate not size when you are trading Forex.
4. Lack of Consistency
Remember, Forex trading is like a sport, you’ve all heard about Tiger Woods, he was well known for training over six hours a day on the golf course. In order to become a successful master Forex trader, you need to actually practice every single day. If you are going to trade and make a good trade today and you are going to skip tomorrow and then maybe trade on the fifth day, you will actually end up losing money without not knowing why.
Why? Because you have to consistently stick to a strategy, and a strategy is a system or a formula that you devise in order for you to accomplish your trading goals. So if you want to reach a target of a $10,000 within a six months period and you start with the 500$ account, you need to actually make an average of the maybe four to ten percents every single day.
Trading in profits in order to reach their target. So if you are not going to trade and you want to become successful overnight then that obviously is going to make you a greedy trader and greedy traders always lose money.
5. Giving Up
If you are going to practice trading Forex, you need to understand that you must never give up. The reason why people lose money in Forex and end up calling Forex market a scam is because they are not consistently trading every single day. And when they lose money, let’s say for instance you fund your account with a thousand dollars and you blow your account.
If you want to be a professional Forex trader, you need to consistently fund your account. You can get your money from the other jobs, you can make money from your salary, you can go wash cars and windows, whatever can make you side money.
But the fact is chances are very high that you are going to blow your account or make significant losses on your trading account, maybe even so much that you actually lose all of your money and then you will need to go back and start from the scratch and fund your account.
You need to have a resistant strong personality if you want to trade Forex, otherwise, you will never make money with Forex.