When someone tells you that trading Forex is easy and you can make tons of money with a few flicks of a finger, know that he is either a fool or a charlatan. Before anyone gets to become a successful Forex trader, he will take a lot of knocks and make plenty of mistakes because the learning curve here is as steep as it gets.

The first step in learning from your trading mistakes so that you can avoid them in the future, is identifying them. Once you’ve identified them, you have to admit to them and accept that you are indeed the one at fault, you are responsible for your trading mistakes and your trading account, so let’s identify the worst mistakes that traders make so that you can get to work on eliminating them once and for all.

1.Trading too much

Trading too frequently is number one on this list for good reason; it’s basically the most prevalent and most destructive mistake traders make, over and over again. You should be aware that it’s extremely easy to trade when you probably shouldn’t, and it’s so easy to do that many traders aren’t even aware they are doing it.

The easiest way to avoid over-trading is to master your trading strategy one setup at a time and then only trade if one of those setups is present. If you trade at any other time, you are trading too much and you will unnecessarily lose money as a result. Thus, not over-trading is something you can only achieve through self-discipline

2. Risking too much

Risking too much money on a trade means you are risking a dollar amount that you’re uncomfortable with potentially losing on that trade. The problem with this is that when you do lose more than you’re comfortable with, it hurts emotionally. This emotional pain or frustration is usually a catalyst for revenge trading, which is when you are so angered or disappointed by a loss that you feel compelled to jump back into the market to try and make back that lost money. Sadly, this is not the proper way to trade and will usually only lead to more losses and a deeper sense of regret, anger and frustration, which only works to perpetuate the cycle of emotional trading.

3. Thinking too much

If there is one profession that lends itself to self-sabotage by thinking too much, it’s trading. At the end of the day, trading is really pretty simple, but our minds make it complicated. It should be as simple as: Is my trade signal present? If yes, then move forward and decide on entry type, stop loss distance, lot size, etc. If no, then don’t enter the trade, go do something else and close the laptop up.

Sitting there, stewing over your charts, trying in desperation to find a trade signal, is going to cause you to over-trade. Or, trying to read multiple financial market news sources in hopes of finding some ‘tip’, is also futile; it’s going to cause you to over-trade most likely. Similarly, thinking too much about a good trade that you have on can also mess you up. Most of the time, you’re better off not thinking about a trade you have on, and if you’re not in a trade and there’s no obvious setup to enter, don’t think about the market at all, you’ll be far better off this way.