Not having a risk management plan: Many traders make the mistake of not having a clear risk management plan in place. This can lead to poor risk management decisions and increase the risk of large losses.
Underestimating risk: Some traders underestimate the potential risks involved in forex trading and take on too much risk without properly considering the potential consequences.
Failing to set stop-loss orders: Stop-loss orders are an important risk management tool that can help traders to limit potential losses on a trade. Some traders make the mistake of not setting stop-loss orders or setting them too wide, which can increase the risk of large losses.
Overleveraging: Using too much leverage in relation to the capital in a trading account can increase the risk of large losses. Some traders make the mistake of overleveraging, which can lead to significant losses.
Not diversifying: Diversifying a portfolio can help to reduce risk by spreading risk across multiple positions. Some traders make the mistake of not diversifying their portfolio, which can increase risk.