Copyright (c) 2010 Rob Patterson

To make money with forex and being a successful trader requires more than the ability to find and execute winning trades. In fact, that is only half of the equation. To be a profitable trader you also need to know when not to trade. Avoiding losing trades is just as important as finding winning ones.

Let's take a look at the 10 most common mistakes that traders make and how you can prevent them. If we can eliminate some of them, then your trading should improve dramatically. The list is not in any particular order.

1. No trading plan. Many traders execute trades without a plan for the trade. Entry, exit, risk, trade management and target should all be determined before the trade is executed. Without a trading plan, you are a ship without a rudder and that is usually a recipe for disaster. Plan your trade and trade your plan.

2. Not using proper money management. Not having a proper money management plan is like walking around with a ticking time bomb... sooner or later you are going to blow up. Good money management is probably the most important aspect of a successful trader. Protecting your capital should be the first thing you consider.

3. Expecting too much, too soon. Some beginning forex traders think that they will learn to trade and become millionaires within a year. Although this is certainly possible, it is not very likely. Learning to trade currencies, futures or stocks is no different than learning any other job. It takes time and hard work to develop the skills necessary to trade and make money with forex.

4. Failure to use protective stops. The problem with not using a protective stop is that you don't know your exact risk for the trade. Using a stop loss is a good money management tool. It defines your risk should the trade turn into a losing one.

5. Lack of patience and discipline. This one is probably the hardest one of all. Like I said above learning to find good set ups is only half of the equation of successful trading. Having the patience and discipline to wait for the realy good trades is how you stay out of the bad ones. Not that you won't have any losing trades because you will. Even good set ups can turn into losing trades. But, if you can eliminate some of the "bone head" trades and correct your mistakes, then you should start to see results in your account at the end of the month.