Useful Reminders prior To making your Trading Goals this Year

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What are the most common Forex trading mistakes that traders make? This article will discuss all of the major mistakes that traders commonly make in the Forex markets. From the most common ones, to the less common, this article will provide an overview of all the important things to look out for and avoid when you start trading Forex (or even for professional FX traders who might not yet be aware of them!).

All people that join the ranks of financial traders, Forex notwithstanding, do so with the intention of making money, however, only a few end up actually being profitable in Forex. What stops so many traders from being successful? And what is different in the trading of the few? Forex mistakes can be an expensive affair and rightly so.

Indeed, in a field where traders attempt to make money, a small mistake can prove to be costly. Just as with any other type of business, trading Forex also requires some guidelines and principles that one must follow. Interestingly though, Forex beginner mistakes can be easily avoided if you can recognise them first.

The Most Common Mistakes Made In Forex Trading

Lacking Education

The first and biggest Forex beginner mistake is not having a full understanding of how the markets work. Forex beginners often think that simply having a good trading strategy is enough. However, they almost always end up losing their money. This is pretty the same as trying to set up a business in a sector you have no clue about. Sound familiar?

Addressing this problem is quite obvious in terms of the solution, and there is not much to discuss. Study like there is no tomorrow, getting a good Forex education is extremely important! Beginners tend to read only a few good trading books, and only a few articles before they start trading. They practise too little, forgetting that they are messing with an occupation that takes years to master!

In fact, beginner traders tend to know so little about financial trading that they often don’t even know where to start. So how can traders avoid making the most obvious and the biggest Forex trading mistake of them all?

By studying, reading, watching webinars, attending trading seminars, practising on a Demo account. Whatever it takes. If you don’t have the time, make the time! You never know which one will be the eureka moment, or how many it will take for you to reach consistent profitability.

Skipping the Trading Plan

You must have heard something about the positive effects of having a trading plan. Well, financial markets are no exception, and not having a Forex trading plan is one of the most widespread mistakes that Forex traders make. Possibly, the reason for this is due to traders not having a clear understanding what a trading plan looks like at all.

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What is a Trading Plan?

A trading plan is a strict set of rules, half of which a trader draws from their trading strategy, and the other half is derived from their money management strategy.

Here is what it might look like:

  • Specific market conditions for entering a trade
  • The amount of money to risk in a trade
  • Specific market conditions for getting out if you are wrong (stop-loss)
  • Specific market conditions for getting out if you are right (take-profit)
  • Approximate time for the market to reach your target
  • Note down and record everything

Undermining Money Management

Things might get hectic in Forex trading quickly, because Forex brokers are allowed a lot of freedom in terms of leveraging their trading account, while beginner traders lag behind in terms of money management discipline. A combination of these two leads to high risk, hazard trading.

Here is a couple things a trader needs to ask themselves, to avoid making this Forex trading mistake:

  • Am I investing only my risk capital? (Can I afford to lose this money?)
  • What is the maximum % of my total investment that I am ready to risk in one trade?
  • What is the maximum amount of trades I can have open simultaneously?
  • What is the win/loss ratio that my strategy promises?
  • Does it comply with my risk/reward ratio per trade?

Money management might sometimes get tricky, because it is strategy dependent. In some cases, you are better off with a strategy that promises a potential loss of $1k and a potential win of $500, that works eight times out of ten. Whereas, some other times you are better off with a strategy that promises a $500 loss to a $1k profit, but works two times out of five. Trial and error is therefore, an important part of the process, and another reason for why traders should use demo trading accounts prior to utilising their strategies in the live markets.

In any case, if you’re just starting out, or if you’re looking for new ideas, our FREE trading webinars are the best place to learn from professional trading experts. Receive step-by-step guides on how to use the best strategies and indicators, and receive expert opinion on the latest developments in the live markets. Click the banner below to register for FREE trading webinars!

Setting the Wrong Goals

Which is a healthier approach to trading?: Doing things the right way, even if it potentially means making less profit or doing things in whichever way, as long as it potentially promises more returns? It’s a tricky question, because what is healthier for both the trader and their account balance is to stop thinking about the money altogether. If making money is the trader’s only goal, especially at the early stages of their trading career, chasing the money may soon become the very reason for failure.

Chasing money typically leads to breaking the rules of your trading plan. In rare specific trades, breaking these rules may lead to a higher yield. In the long run, however, which is hopefully your plan for financial trading, it almost always leads to an empty account balance. This may happen in one of the following ways, or via a combination of them: Overtrading, and Over-analyzing.

Overtrading: one of the mistakes many Forex traders make may come from insufficient capitalisation, resulting in a trader using high volumes that are simply too large, relative to their account balance, or it may come from a trading addiction, resulting in a trader opening orders too often.

Overtrading problem one – insufficient capitalisation:

Forex trading generally comes on highly leveraged accounts as it is. Not having enough money to manage simply improves the chances of a disaster occurring. It was mentioned earlier in the money management section, that a trader should always decide just how much money they are willing to risk per trade beforehand.

What about the traders that make it? How much do they risk? Do they use 100%? or 50%? Or even 10% of their account balance in a trade? The answer is none of them. Instead, 1% or 2% is the absolute ceiling you can go for. And how much of their capital can be involved at one time? And with all trades combined? The answer is: 5-7%. Such careful money management will allow you to make some room for the Forex mistakes that you will inevitably make, simply as a part of your learning process.

Well how much is enough then? Here is an example:

If trading you are trading a 0.01 lot (1,000 units of currency), which is the minimum Forex trading volume any broker can offer, you would need at least one thousand US Dollars in terms of investment, on an account with 1:100 leverage, to afford opening a single position at one time. And for that position, you can’t set a higher stop-loss to just 50 to 60 pips, because that would make your total: 5-7%.

And we are talking about a fixed stop-loss, not a mental one, because as soon as the price goes through a mental one, a trader starts re-rationalizing their decisions, further diverting from their original fixed trading plan. Top tip: Never avert from the trading plan!

So how can traders avoid undercapitalisation without breaking the risk capital rule? The answer: Save money! You can do it. Warren Buffett saved up to around $10k during his college years by performing low-paid, miscellaneous jobs. It worked out for him just fine, even without the luxury of a 1:100 leverage!

Overtrading problem number two – trading addiction:

Trading financial markets, especially on short-term intervals, can be a very exciting activity. The markets move, the money flow is real, and it is live. An exhilarating experience indeed. It is almost as if the market wants to be traded. This delusion should not, however, dictate your trading. You have a plan to follow, remember?

Chasing money takes its toll. If one is aiming to increase one’s profits, a trader bends their strategy just ever so slightly, entering where they should be patient, and exiting where they should be tranquil. Over-analysing comes hand in hand with overtrading.

Possibly one of the biggest mistakes made by Forex traders is thinking that they have control over the market. They don’t. Successful trading is much like fishing, where the fisherman has no control over the fish. There is not much you can do until the fish has caught your bait. Once it has, act. Once the market price is just where you want it, you trade. But before that moment, all you can do is sit still.

Your strategy tells you exactly which market conditions you should wait for. If they are not there, there are simply not there. Not because you missed them, not because you should check for them on smaller time-frames, and not because there is a hole in your strategy. The sooner you start thinking about waiting for a market to set up right, to start saving money rather than losing it, the better off you are going to be.

Confusion of Purpose

This may come as somewhat of a surprise to some, and to many beginner traders it does, but trading financial markets is a business, while most treat it as entertainment or a hobby. Confusing why you want to be involved in trading is one of the main Forex trading mistakes to avoid. First of all, it influences the level of your commitment to trading.

Secondly, it defines your attitude toward the money you invest. Entertainment is for having fun. Business is for making money. In financial trading, you invest money to make a return on your investment, which essentially makes the concept of trading, a business. If you ever hope to make money on a consistent basis in Forex trading, act like a businessman.

Other Common Mistakes Made In Forex Trading

Being Too Greedy

One of the common Forex trading mistakes you can make is to fall into the trap of getting too greedy. Many Forex beginners have the wrongful impression that they can earn 20%, if not more, in terms of return within a single year. Unfortunately, this is a wild goose chase. You cannot realistically expect such high returns unless you are an exceptional trader, with a lot of experience, and a good education in trading. Setting the right trading goals can help you to avoid mistakes while trading forex, and can help you to become a professional FX trader.

Poor Risk Management

Risk and rewards go hand in hand in any market. The truth is that Forex beginners don’t pay much attention to this. Risk management is an essential part that will define your success in trading Forex. You cannot expect to make profits by blindly following a trading strategy, or by soley using an expert advisor, or an automated trading solution. When you manage your risk effectively, achieving rewards becomes a reality, and not just a possibility.

Risk only the capital you can afford to lose, and nothing more. Believe it or not, there are numerous Forex beginners who trade with capital that they cannot afford to lose. This can be disastrous because the Forex markets, just like most other markets, such as equities or fixed income, are notoriously risky. There are no guarantees that you will always make money. Losses in trading are part and parcel of Forex trading.

There is also additional pressure when you trade with money that you cannot afford to lose. It prompts you to make wrongful trading decisions, so try to avoid this if possible.

Ignoring the Psychological Aspect of Trading

Another mistake for traders is to ignore the psychological aspect that plays a part in trading. Psychology plays a big role in terms of avoiding making mistakes in trading Forex. The markets are after all, made up of traders just like you for the most part. Understanding market psychology and yourself is a good starting point in recognizing this mistake. You might already know that fear and greed are two of the most common psychological emotions that can affect your trading.

To avoid this, you must not only train your mind, but you should also approach the markets objectively.


Studying, researching, planning, following your trading plans, taking notes of your progress, and doing all of that while protecting your investments, are some of the best steps you can take to avoid making Forex mistakes. Not following these simple techniques is the biggest mistake Forex traders can make. It goes without saying that you should practice as much as possible, before you implement your strategies.

Luckily, Admiral Markets offers a risk-free demo trading account that enables you to do just that! Trade with virtual funds and real-time data, in a risk-free trading environment, so that you can test out your techniques and perfect them, before making your transition to the live markets.

Click the banner below to open your FREE demo trading account today!

About Admiral Markets
Admiral Markets is a multi-award winning, globally regulated Forex and CFD broker, offering trading on over 8,000 financial instruments via the world’s most popular trading platforms: MetaTrader 4 and MetaTrader 5. Start trading today!

This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.

Golden Rules of Goal Setting

Five Rules to Set Yourself Up for Success

Have you thought about what you want to be doing in five years’ time? Are you clear about what your main objective at work is at the moment? Do you know what you want to have achieved by the end of today?

If you want to succeed, you need to set goals. Without goals you lack focus and direction. Goal setting not only allows you to take control of your life’s direction; it also provides you a benchmark for determining whether you are actually succeeding. Think about it: having a million dollars in the bank is only proof of success if one of your goals is to amass riches. If your goal is to practice acts of charity, then keeping the money for yourself is suddenly contrary to how you would define success.

To accomplish your goals, however, you need to know how to set them. You can’t simply say, “I want” and expect it to happen. Goal setting is a process that starts with careful consideration of what you want to achieve, and ends with a lot of hard work to actually do it. In between, there are some very well-defined steps that transcend the specifics of each goal. Knowing these steps will allow you to formulate goals that you can accomplish.

Here are our five golden rules of goal setting, presented in an article, a video and an infographic.

Click here to view a transcript of this video.

The Five Golden Rules

1. Set Goals That Motivate You

When you set goals for yourself, it is important that they motivate you: this means making sure that they are important to you, and that there is value in achieving them. If you have little interest in the outcome, or they are irrelevant given the larger picture, then the chances of you putting in the work to make them happen are slim. Motivation is key to achieving goals.

Set goals that relate to the high priorities in your life. Without this type of focus, you can end up with far too many goals, leaving you too little time to devote to each one. Goal achievement requires commitment, so to maximize the likelihood of success, you need to feel a sense of urgency and have an “I must do this” attitude. When you don’t have this, you risk putting off what you need to do to make the goal a reality. This in turn leaves you feeling disappointed and frustrated with yourself, both of which are de-motivating. And you can end up in a very destructive “I can’t do anything or be successful at anything” frame of mind.

To make sure that your goal is motivating, write down why it’s valuable and important to you. Ask yourself, “If I were to share my goal with others, what would I tell them to convince them it was a worthwhile goal?” You can use this motivating value statement to help you if you start to doubt yourself or lose confidence in your ability to actually make the goal happen.

2. Set SMART Goals

You have probably heard of SMART goals already. But do you always apply the rule? The simple fact is that for goals to be powerful, they should be designed to be SMART. There are many variations of what SMART stands for, but the essence is this – goals should be:

Set Specific Goals

Your goal must be clear and well defined. Vague or generalized goals are unhelpful because they don’t provide sufficient direction. Remember, you need goals to show you the way. Make it as easy as you can to get where you want to go by defining precisely where you want to end up.

Set Measurable Goals

Include precise amounts, dates, and so on in your goals so you can measure your degree of success. If your goal is simply defined as “To reduce expenses” how will you know when you have been successful? In one month’s time if you have a 1 percent reduction or in two years’ time when you have a 10 percent reduction? Without a way to measure your success you miss out on the celebration that comes with knowing you have actually achieved something.

Set Attainable Goals

Make sure that it’s possible to achieve the goals you set. If you set a goal that you have no hope of achieving, you will only demoralize yourself and erode your confidence.

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5 Ways to Increase Your Earning Potential This Year

Want to make more money this year? Here are some things to consider.

There’s never a bad time to step back and review how things are going in your career: the new year, after a promotion (or lack thereof), the end of a quarter or following a stressful month. Even if you have your sights set on increasing your earning potential, it can be easy to get stuck in the daily grind and overlook proactive steps you could be taking right now.

Get motivated on the career front and consider these five tips to help maximize your salary potential this year:

1. Ask for a raise

It’s a pretty good time to ask for a raise. Really. According to the U.S. Department of Labor, the unemployment rate is low and employers are starting to boost salaries to attract workers. See how this can play to your advantage? Check out websites like or job postings in your area to find out how much employers are paying for gigs like yours. You can leverage that information when you talk with your boss, while highlighting the experience you bring to the table, to negotiate a raise and boost your earning potential.

If you’re nervous to pitch yourself for a raise, remember that hiring and training new employees has real costs. Keeping employees at a higher salary can be cost-effective when compared to the expense of recruiting and training someone to replace you.

If you don’t come out on top in a salary negotiation, proceed to tip two to increase your earning potential.​

2. Explore new opportunities

Historically, employees believed the quickest way to increase their earning potential was to change jobs. While there are no guarantees your salary will increase, there are several estimates that indicate the possibility. According to one estimate, the average raise an employee receives for leaving is between a 10 percent to 20 percent increase in salary.

When it comes to looking for a new job, an immediate boost to salary may not be the only financial consideration. A Gallup study found, more than a salary increase, the top reason U.S. workers consider new jobs is to, “do what they do best.” Switching jobs might lead to being more engaged with the work you do, as well as having opportunities for advancement and the ability to learn and grow. Down the line, a promotion or new skills can mean increased earning potential.

3. Find a mentor

Having an idea of where you want your career to go—this quarter, next year or in the next decade—can pay off enormously, but you don’t need to make these plans all alone. A good mentor can provide feedback or advice based on his or her own experience, and help ensure you’re on target to increase your earning potential. It may sound like a sweet deal, but it’ll take some effort on your part:

  • First, reflect (on your own) about how your career has been going. It will help you have a more meaningful and effective conversation with your soon-to-be mentor. This reflection worksheet is a good starting point.
  • Second, find a professional organization or meetup group for your industry that matches up mentors and mentees. By meeting people in your industry whom you don’t directly work with, you can have candid conversations about how your career is going, your strengths and weaknesses, and ways to maximize your salary potential.
  • Third, once you’ve connected with a potential mentor, set up an initial conversation. Don’t forget to ask if they’d be willing to talk again in six months or so.

4. Start a side hustle

A side hustle is a flexible job you do “on the side” that can increase your salary potential. Of the many ways to earn money outside of your main job, starting a side business can be a valuable option. The business skills you learn as an entrepreneur can pay off in other parts of your career. You could also give freelance work or consulting a go, leveraging skill sets you already have to help problem solve for other companies.

With any second job, however, it’s easy to fall into a trap of trading your time for money without improving your skills in a meaningful way. Weigh the pros and cons to ensure you’re balancing the desire to increase your salary with the desire to advance your career. Take driving in a ride share program, for example. Pro: It can be a quick and easy way to increase your earnings. Con: It may not benefit your primary career if you work in a very different or unrelated industry.

5. Learn to code

Coding can be something learned at any career stage to help boost your earning potential in short order. When analyzing its graduates, CodingDojo, a coding boot camp, found that more than half of students were earning less than $35,000 before entering the program. After graduating, the majority of students earned salaries that topped $70,000.

There are free online classes where you teach yourself to code or programs as short as one month where you can learn from a pro all the coding basics you need. Even if an industry switch isn’t in your future, understanding the basics of coding could improve your ability to work with technology, data, programmers and engineers.

Increase your earning potential

Whether it’s with your current employer, at a new company or as your own boss, you should be utilizing your skills where they are appreciated most. By making a conscious effort to invest in your existing skills and develop valuable new ones, you can help increase your earning potential every year—not just this one.

Open a savings account and have it at the ready to make the most of your increased earnings.

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