Forex trading is sometimes taken as a guarantee to sure shot profits in a very less time. It is true to a large extent but one needs to be very cautious and alert while trading currency. If one is smart enough to avoid some the pitfalls that come along with Forex trading there is no other trade that will earn you loads of money.
People tend to make mistakes while doing their bit in the market. But the smart investor will always look for the mistakes that have been committed in the past by traders and will surely avoid them and keep them at bay so that he does not loose whatever he has invested or earned in the market.
The major mistake to be avoided while trading currencies is overtrading. Avoid adding to losing position by adding another contract. The logic often behind such moves is their average price will be better and it will be easier for them to get to the breakeven point by trading 2 contracts rather than just their original contract. And in the long run if if the market continues to move against them they are faced with a bigger loss than that would have been had they stuck to one.
Another mistake is loss of patience. This mistake is the most common one that is done by most of the forex traders who are ignorant of the dynamics of Forex Trading. Get rich overnight stories carry away new traders and they expect to earn a large number of profits in a few days with a single push of button which is very rare in the forex or any other industry. You have to put in your heart and soul and wait for the fruits.
Many people will jump into the trade without checking the nuances and end up cursing the trade when they will loose their money there. The shortcoming is theirs as they didn't prepare themselves enough to be a part of this industry. Make sure you are skilled enough and have the right tools and techniques before you start trading in this dynamic industry.