1. Scam Forex brokers — a number one problem for a starting trader and some experienced traders that want to move from one broker to another. Be advised that there are many on-line brokers that will just steal your money, or will hunt your stop-losses to bankrupt your account, or will provide no support at all. Just stay with the brokers that are reputable and trustworthy until you learn to detect Forex scams yourself.
2. Overtrading — sometimes you will start to lose money on trading just because you stay in the market for too long. Don’t overtrade, set daily goals for profit, limit for loss and don’t trade past them. Overtrading is one of the major psychological barriers in Forex trading.
3. Wide spreads on high volatility — some Forex brokers increase their spreads for all currency pairs during the hours of high volatility (i.e. news releases). That can damage the whole trading strategy, so you must be aware if your broker uses such tactics and avoid losing money because of it.
4. Following wrong Forex signals — sometimes you may find yourself losing, because you follow someone else’s Forex trading signals. Actually it is a good idea not to follow any signals at all (except for the ones, generated by your trading system), especially the paid ones. Trading your own Forex strategy brings in your sole responsibility for all your trades. If someone’s providing paid Forex signals, chances are they are not very accurate. Why would one sell them if he could earn money with just trading?
5. Lack of knowledge — the lack of required knowledge to trade Forex will dump your trading account very fast. Educate yourself; don’t let your emotions control yourself and trade only when you are sure about its success. There are plenty of free educational materials available on-line, don’t be lazy and learn whenever you have a time for it.
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