Most novice traders get wiped out quickly. It's a fact that overall, 95% of traders lose their money and that's a huge percentage. However most of the mistakes these novice traders make are avoidable and you will find them enclosed...

The list of mistakes is in no particular order of importance, make any of them and you will lose.

1. Trusting a Forex Robot or Expert Advisor

Most traders get taken in by the hype - pay a couple of hundred dollars, get an income for life and make money with no effort with an automated trading system.

You won't be surprised to learn these systems don't work. If they did the whole world would trade and no one would work!

2. Day Trading and Scalping

Another group of traders like to trade short term moves but all short term moves are random and they soon get wiped out.

3. Trading Breaking News

Simply a dumb way to trade yet numerous traders do it.

The facts are there for all to see but all traders see them differently and draw their own conclusions from news stories, with their opinion coloured by the emotions of greed and fear. The facts are not important, it's what people think of them that counts; never trade breaking news.

4. Trying to predict the Markets in Advance

Prediction is hoping or guessing and that won't get you far in Forex trading.

Forget the far out investment crowd who follow such disciples as Fibonacci, Gann and Elliot, these theories are not scientific as people claim they are, if they were they would work all the time and they don't. If you could predict human behaviour, we would all know the price in advance and there would be no market.

5. Curve Fitting a System

The best systems are simple but most novice traders think the opposite is true.

They want to be clever, so they try and cram as many indicators in as they can to their system and bend it to fit past data. This is called curve fitting and it doesn't work. No two pieces of data ever repeat exactly and the system collapses in real time.

6. Hard Work means you get rewarded

In a 9 - 5 job it does but not in Forex markets; you get paid on results and really you don't have to work hard, you simply need to work smart.

7. Not Expecting Losses

To many traders think Forex trading is easy and think they will never face weeks of losses.

When they do, confidence and discipline crumble and they throw in the towel. If you want to win at Forex, you have to learn to lose and keep your losses small and this means executing your system with discipline. If you can't execute your trading system with discipline, you don't have one.

8. Leverage and Money Management

Most traders over leverage their accounts and lose.

Brokers will give you 200:1 leverage as standard and a novice will use it and blow his account out the water. As a novice trader, you should start with no leverage at all or a maximum of 10:1.

The above mistakes are easy to avoid, so make sure you avoid them or you will join the 95% of losers.