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Forex is the biggest market worldwide, having an average daily turnover of $5.3 trillion - and counting. Not all traders, however, reap sweet victory in the huge market. Here’s why.

Failure to Adjust to Changes. How to keep up with the market? Analyze each scenario and determine the suitable moves and countermoves to lower the risk of huge, sudden losses. The market exhibits different scenarios and risks; hence, it evolves. Losses are inevitable. However, the best way to minimize its effect is to modify the trading strategies to contend with such conditions. In simplest ways, educate oneself and live with the changes. After all, nothing in this world is constant but change.

Not Instilling Discipline. The very first rule of trading is to never let emotions affect the way you trade. While it’s natural to react at every turn, traders should learn how to rein in their emotions, win or lose. As much as possible, do not succumb to fear and greed and letting losing trades get out of hand. This is why it is vital to have a trading plan to avoid such instances. Currency trading is not for the feeble.

Trading Impulsively. Benjamin Franklin once said “By failing to prepare, you are preparing to fail.” Trading without any plan at all leads to hefty losses. Having a feasible trading plan, which entails the estimated return on investment and curbing risks, helps an investor maximize returns and minimize losses.

Trial and Error. Trading is not gambling and it will never be. Therefore, trading through trial and error ensures your way to failure. Investing in currencies involves calculated steps, learning from the exports, creating a sound plan, and monitoring market movements. You can take online courses or read materials about trading to boost your skills. You may also opt to mirror the performance of a renowned trader.

Too Good to be True Aspirations. Trading is not the pathway to become rich overnight. Success is equivalent to discipline, hard work, education, good trading plan, and damage control. Attempting to cash in on unrealistic goals normally leads to risking more capital than gaining profits.

Unsatisfactory Money and Risk Management. Formulating a well-laid trading plan includes mapping out ways to counter risks. But not all traders put much emphasis on guarding their trades and placing stop losses and other techniques. Successful traders know the exact amount of capital they are risking and prepare the right measures to topple losses. It is also important to preserve capital. This is where diversification comes in - suitable position sizing when trading currencies.