The forex market is the widest, open and most accessible financial market in the world, but albeit there are many forex investors with different levels of experience and know-how, few are truly able to taste success. Some common pitfalls plague all traders and can hinder them from achieving their investment objectives. Among those hundreds of reasons I'd like to share with you seven important points which I feel cover a lot of ground.
-  No shortcut to success: Majority of traders are intra-day traders seeking to pick up a few pips and get going. Now trying to correctly predict the minor pip blips on a regular basis with a long term profit is something nearly impossible for such traders to do.
-  Successful FX trading is actually boring if one may say so: You probably won't hear that a consistently profitable trader's job is boring, because everyone just assumes it's super awesome with a flamboyant lifestyle. That's a myth. Very few traders are long term as it requires very sound knowledge of the fundamentals and economics. It takes time to grasp all this and most traders probably find it monotonous and tough. Trading should be bereft of emotions if you are doing it right. Once you reach a level where you have curbed your feelings and you are able to retain your composure even after a loss, you will be on the right track.
-  Overtrading: Many traders with limited capital often exceed the risk limits and open too big orders hoping that they could draw their daily sustenance through trading. This is sometimes a part of their trading strategy actually. In the financial world this is call overtrading - it is the reckless way of incurring losses and/or burning down your account for even amongst the most seasoned traders. Therefore if you eliminate the possibility of overtrading (i.e.by a proper construction of your trading plan)-you will minimize the possibility of experiencing losses.
-  One cannot become a successful trader overnight: Most brokers selling "magic-bullet" FX trading software really want you to believe that trading is hassle-free and that soon you'll be able to earn a steady, fulltime income out of the markets. The bottom line is that anyone can be a successful trader only if they are committed to work towards it. But for many traders such trading discipline is next to impossible.
-  The more money you chase, the harder it gets: Perhaps the most plausible explanation as to why many traders lose money over the long-run in the markets is because they put too undue pressure on themselves to make it.
-  Fancy Software won't script your success: Most trading websites are not going to tell you that you really don't need fancy trading software or multiple trading screen setups to be successful in the markets. The fact is you can actually trade reasonably well just from your laptop and a free charting program like Meta trader. The most important tool in your trading arsenal is you, or more specifically your brain, not trading paraphernalia.
-  You don't have to be exceptionally smart to trade successfully: Most people think that professional traders are Ivy-League maths prodigies who have some exceptional aptitude to mint money in the markets. This is really not the case; in fact, many successful traders never even went to college or are dropouts.What is required is to make disciplined and patient trading a habit and a part of your daily trading routine.