Lets Learn from the Others Mistakes

Skip to Main Content

Lets Learn from the Others Mistakes

In this article, Id liketo outline some of the mistakes thatforex or stock traders make, to helpyou learn
from thesemistakes, and not to repeat the same mistakes. I think you remember that in one of my recent
posts, I mentioned that The wise learns from the others mistakes. The fool learns from his own, if he
learns at all.
This is very true in forex trading. If you want to learn from your own mistakes, it can cost you a lot of time
and money. But if you learn from those who have already made all the possible mistakes that a forex trader
can make, it will save you a lot of time and money. It will shorten your learning journey and you will
become a profitable forex trader sooner.
There are two kinds of mistakes that novice traders make. One is the mental and psychological mistakes,
and the other one is the technical mistakes.

Mental and Psychological Mistakes:

1. Forex is a get-rich-quick scheme:
This is what many novice traders think. Forex makes money whileyou dont need to promote any products
or services, make any phone calls, sell anything to the customers and . This is true, but it doesnt mean
that forex is a get-rich-quick scheme. It can potentially make a lot of money, butyou will lose a lot of
money if you deal with forex as a get-rich-quick scheme.
2. More trades, more money:
Forex is not like the other businesses that when you make more sales, you make more money. In forex,
you have to wait for the market to give you a trade setup, whereas with the other businesses you have to
spend more time, money and energy to make more sales to make more money. In forex trading, you have
to be patient enough to wait for the trade setups. In the other businesses, you have to work more to make
more money.
In forex trading you have to wait for the market to give you an opportunity. In other businesses, it is you
who has to create the opportunities.
3. I canmake money through forex trading while I have no income and I need to pay my bills.
You will not make any money through trading, if you have to make money. I mean you can not make any
money through trading when you are already in trouble paying your bills. To become able to make money
through trading, you have to have an income that covers your expenses, and so you can focus on learning
with peace of mind. If you push yourself to make money through trading, you are hammering to lose your
money. When you are in need, you lose your patience and you click on the buy/sell buttons while there is
no trade setup.
Forex or stock trading is like hunting. You can not take your rifle and shoot aimlessly to hunt something by
chance. Youonlywaste your bullets. You have to look for the prey sometimes for several days. Sometimes
you have to walk in the woods or mountains for weeks, or you have to sit in your ambush for days, until
you can hunt something.
It is the same with trading. You have to wait for a trade setup to form. If you just take a position while
there is no setup on the chart, you lose.
When you have to make money to pay your bills, you push yourself to take positions while there is no
http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

trade setups, because you have to pay your bills on time.

Please read this article very carefully.
4. I am a great teacher, doctor, engineer, mathematician, scientists, , AND SO I can make money
through trading definitely.
Absolutely wronganalogy!
I have seen so many highly educated people who have done nothing but losing money in trading, and also
so many non-educated people who succeeded to make money consistently.
The truth is that trading has nothing to do with education. You can make money through trading without
anyacademic education, and with having a normal IQ. The only thing you need is learning some rules and
then a discipline to follow those rules. If you do this properly and precisely, you can make money through
trading. If not, you lose, no matter how educated you are.
Even many educated people are not disciplined enough to wait for the trade setups.Many of them are so
proud of their education, and so they underestimate the forex market and think that the market has to
follow what they say and predict. This is wrong. Markets dont follow anybody. We have to follow the
markets.
5. I have to invent and develop my own trading system.
Again, this is the problem of many educated people. They think they are smarter than following the others
trading systems, and they have to develop their own. They spend a lot of time and money to do it, and will
finally give up. There are simple and easy to use, yet strong and effective trading systems that anybody can
use to make money. Why should we try to develop a unique trading system?
I have seen so many traders who have been working on their own system for years without any result.
They develop a new system every week and modify it every day until the next week that they develop
another new system. We are here to trade and make money, not to invent something. Do you agree?
6. The more I learn, the better I will trade, and the more money I will make.
This can be true about the other businesses, but not with forex trading. It is good to learn more, but you
should know how to use this knowledge to strengthen your trading system. In many cases, the new things
you learn deviate you from the right track and make you try new things that had not been tried before.
Learning new things doesnt mean winning in trading.
Of Course, experience is good and valuable, and you will become more experienced every day, and so you
will make less mistakes and your success rate will go up. But learning and trying things can cost you time
and money. To make money through forex trading, you dont have to keep on learning all the time. Just
learn the trading basics, and then a trading system, and then master your trading system.
Please read this article very carefully. I have explained about the things you have to learn to start making
money.

Technical Mistakes:
1. Trading using the indicators like moving averages.
The only moving average that the markets show reasonable reactions to it, is the Bollinger Middle Band
which is a 20 simple moving average. The other moving averages are money suckers. Things you hear like
have a 40 or 100 or 200 or MA on the chart, and go only long when the price is above it, and only
short when the price is below it, is the most stupid thingsome so-called trading gurus say.

http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

Many of the indicators like Stochastic are money suckers too.

2. More indicators, more confirmation, and so a stronger and more reliable trade setup.
Candlesticks are the best and most real time indicators that reflect the markets sentiment directly and
without any manipulation. They will be stronger when Bollinger Bands are added to them. If you like to
have more confirmation, you can use MACD the way it is explained here andhere. You dont need anything
else, if you want to make money. If you want to lose, then add more indicators to the chart and make it
too complicated.
3. Short time frames generate more trade setups, and so I can make more money.
Short time framescan generate more trade setups, but how profitable those trade setups are? How many
hours do you have to sit at the computer waiting for the short time frames to generate the trade setups
you want? How strong and reliable are those trade setups?
A trade setup on the 5min chart maymove the price for 20 pips while you have been sitting at the
computer waiting for it to form for several hours. A trade setup on the daily chart can move the price for
hundreds of pips, while you dont have to sit at the computer and watch the chart all the time. You just
need to check it once every day.
Most new traders think that working with the short time frames make more money, but I have never seen
this during the past 23 years. I have only seen that these traderslose more, and either they will have to
switch to the longer time frames, or they give up on trading. If you want to repeat the same mistake and
waste your valuable time, then trade the 5min and 15min charts. I do not even look at the 1hr and 4hrs
charts, because they are not worth to be looked at.
4. Trade one special currency pair and master it.
I dont know what mastering a currency pair mean. Each currency pair can form some strong trade setups
every now and then. When you work with the time frames like daily, you can follow several currency pairs.
It doesnt take you more than few seconds to check each chart.
Of course some currency pairs are not good. For example, I dont check AUD/NZD, because its spread is
usually too high, its movements and trade setups are not strong enough and . I do not follow the exotic
pairs too.
5. Having no stop loss.
You will lose all you have in your account if you set no stop loss, no matter if you have won in one million
trades consecutively. This is the lesson those who use no stop loss will learn sooner than later. Do not learn
it the hard way.
Good luck

Download Our E-book For FREE and Don't Miss

Our New Articles!
Enter your email address and check your inbox now:
Send

http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

Article by Chris Pottorff

"Whether you think you can, or you think you cannot, you are right." - Henry Ford

26 Comments:
1.

Toh

August 3, 2014 at 10:07 am

Its a great article as usual.

(0)
Log in to Reply
2.

Joshua

August 3, 2014 at 12:40 pm

God bless you for the warmth advice.

(0)
Log in to Reply
3.

Ayobami

August 3, 2014 at 3:40 pm

Truth is truly bitter. Thanks for this your great article.

(0)
Log in to Reply
4.

Essar

August 4, 2014 at 2:04 am

Very simple and informative, well explaineddeserve immense appreciation for your contribution to
aspiring traders.well done!
(0)
Log in to Reply
5.

Vinod

August 5, 2014 at 1:41 am

Dear sir. you always write in your articles that bigger time frame is good for the trading and daily
chart is suitable. kindly tell us how to trade with Daily candle. and how to take position of trade in
Daily chart. what to see in daily chart before doing any trade. whether to move in small time frame to
take position. any article for the same.
(0)
Log in to Reply

Chris Pottorff

August 5, 2014 at 6:30 am

Hi Vinod, My friends and me having been trying to explain how we trade during the past 5
weeks. If you refer to our archive, you will find the answer of your questions:
http://www.fxkeys.com/archive/
http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

(0)
Log in to Reply

Prem Kumar

6.

December 26, 2014 at 11:58 am

Sir,
Your articles are motivating and guiding us. Thank you.
(0)
Log in to Reply
7.

San

December 26, 2014 at 5:41 pm

Can you please elaborate on this

For example, I dont check AUD/NZD, because its spread is usually too high, its movements and
trade setups are not strong enough
How to determine which currency pair has higher spread?
(0)
Log in to Reply

Chris Pottorff

December 27, 2014 at 8:07 am

This is what we have experienced with AUD/NZD, compared to other pairs.

(0)
Log in to Reply
8.

Duane

December 26, 2014 at 7:13 pm

Hey Chris, this is one of the best articles I have ever read on trading. Thanks for sharing your
knowledge!!
(0)
Log in to Reply
9.

Istvan Erdelyi

December 28, 2014 at 3:35 pm

Lol, You Are All sheep!

One can not win but broker!
(0)
Log in to Reply

Istvan Erdelyi

December 28, 2014 at 3:40 pm

At all this article is great.

You see the very problems
and every minute is waste of time.
You had better deal with your job and family!
(0)
Log in to Reply

Istvan Erdelyi

December 28, 2014 at 3:41 pm

http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

I agree with all features

mentioned. It is state of art.
(0)
Log in to Reply

Chris Pottorff

December 29, 2014 at 1:54 am

A professional profitable trader can spend more time with family. It is OK to hold your time
job and at the same time trade forex:
http://www.fxkeys.com/how-does-it-feel-to-be-a-professional-full-time-forex-trader/
http://www.fxkeys.com/when-quit-your-job-as-a-forex-trader/
(0)
Log in to Reply

Chris Pottorff

December 29, 2014 at 1:53 am

Of course brokers make a lot of money, specially market maker brokers, because over 95% of
the traders lose.
(0)
Log in to Reply
10.

Paul

January 1, 2015 at 10:21 am

Thanks
(0)
Log in to Reply
11.

TJ Chance

May 9, 2015 at 6:08 pm

Hi Chris, You must have been a psychologist in another life.

I mean, you explain so well what
needs to be understood. I am pretty sure that if you have some children they are very well-educated.
Thanks again sir.
(0)
Log in to Reply
12.

Jae Task

May 13, 2015 at 12:52 pm

I have just read this again for the second time and its even more informative. Thats the thing with
FxKeys, there is so much to take in, its impossible all in one go. Sometimes I have read 10 articles a
day and its too much. The slow and constant way is the way to go.
(0)
Log in to Reply
13.

Fx Learner

May 18, 2015 at 8:16 pm

Very useful ! Thanks.

(0)
Log in to Reply

http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

Muhammad Hassan`

14.

June 17, 2015 at 1:18 pm

nice one,,,,,now i remember my mistakes too..and trying to learn carefully

(0)
Log in to Reply

Michael .

15.

July 4, 2015 at 5:21 pm

I feel like im getting mixed signals on FxKeys. In this article for example, you say
The only moving average that the markets show reasonable reactions to it, is the Bollinger Middle
Band which is a 20 simple moving average. The other moving averages are money suckers.
and
Many of the indicators like Stochastic are money suckers too.
Yet there are multiple articles on FxKeys about the benefits of moving averages (50-day, 200-day)
and stochastic indicator. Its like they are written by different people with opposing views. As a
beginner, thats really confusing. I dont know what to believe anymore. One article teaches one
thing, then another teaches the opposite (or so it seems to me anyway).
(0)
Log in to Reply

Chris Pottorff

July 5, 2015 at 12:32 am

Michael,
I have also explained in many of my articles that all indicators, including candlestick which is my
favorite, are money suckers if one doesnt know how to use them:
http://www.fxkeys.com/stochastic-oscillator-a-mechanical-indicator-for-forex-trading/
All systems and indicators work if you know how to use them and if you wait for the strong
setups.
In those articles, that are mainly written by me, I have explained the proper application of those
indicators.
(0)
Log in to Reply

Michael .

July 5, 2015 at 11:04 am

Chris,
I see what you mean and i agree. Nevertheless it still looks strange to me that Trading
using the indicators like moving averages should be filed under technical mistakes. All of
the other ones, like short timeframes, no stop loss, etc belong in the list without question.
I just have doubts about the first one. But with the added explanation you gave, it makes
sense. Maybe it would be better called using indicators without the proper knowledge or
something similar.
(0)
Log in to Reply

http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

Chris Pottorff

July 6, 2015 at 2:23 am

Michael,
I have been thinking about you when I was not at the computer during the past few
hours. Maybe you are not the one that feels confused. Please read my most recent
post and decide about the trading system you want to follow. You can choose any of
the candlestick + BB or Stochastic systems:
http://www.fxkeys.com/quick-start-guide-for-new-forex-traders/
(0)
Log in to Reply

Michael .

July 6, 2015 at 6:03 pm

Thanks, thats a great article, i had not read it before. Its much simpler than
the 5 steps article, even though i still want to read every link in that as well.
Im determined to learn the candlestick + BB system, but maybe ill try the
stochastic semi-mechanical system as well, in a separate demo account.
(0)
16.

aleem abdul

July 11, 2015 at 10:21 pm

IT is really amazing to see your noble act of helping other traders to achieve success trading forex.
(0)
Log in to Reply

Leave a comment:
You must be logged in to post a comment.
Home Basics Lets Learn from the Others Mistakes

Search Articles

Search for: search here

Go

Subscribe to our RSS Feed

Enter your email here to download our e-book for FREE and receive our latest articles in your inbox
automatically:
Send

Members
User
Login
Logout
Account
Register
Your Ads
Your Stats
Password Reset
http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

Disclaimer and Risk Warning

Pages
Home
About
Forums
Archive
Contact
Dictionary
Privacy Policy
FxKeys Toolbar
Submit an Article
Advertise for Free
FxKeys Chat Room
Forex Market Analysis
Disclaimer and Risk Warning

Recent Posts
The Power Of A Trend Formed After A Too Strong Setup
Differences Of Strong And Weak Support And Resistance Levels
The Risk Of Taking A Weak Trade Setup
Energy Vampires: How To Deal With Negative People Who Suck Your Vital Energy
Strong Trends and Continuation Signals Around Bollinger Middle Band

Categories
Basics
- Demo Trading
Candlesticks
Currency Pairs
Economy
Forex Brokers
FxKeys Risk Free Trading
Indicators
- Bollinger Bands
- MACD
- RSI
- Stochastic
Investment
Make Money
Market Analysis
MetaTrader
Miscellaneous
Money Management
News Release
News Trading
Success
Technical Analysis
Trading Psychology
Trading Systems
Videos
2015 FxKeys.com

http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]

Lets Learn from the Others Mistakes

Do You Want To Make Thousands ofDollarsTrading Forex?!

Let Us Tell You How!

Download OurE-book For Free!

Enter Your Email Now and Then Check YourInbox Immediately:
Send

http://www.fxkeys.com/lets-learn-from-the-others-mistakes/[8/9/2015 7:52:11 PM]