Mistakes When trading currencies

When trading currencies online, there seems to be no end to the mistakes a beginning forex trader can make. Beginning traders are always the most susceptible, but experienced traders can often revert back into bad practices as well. Here are some of the most common trading mistakes listed in no particular order, and how to avoid them.

Predicting instead of reacting. Otherwise known as overconfidence. This usually happens after a winning trade or two. The trader starts to think that if he can enter a trade sooner, he will get more pips. He begins to believe he can pick the top or bottom before the market reveals it to him. So instead of reacting to what the market is telling him, he starts to predict what the market will do. He enters a trade and the market continues its move, which is against him. Now, does he admit he was wrong and close his position, or does he add to it?