Why Beginners Fail in Forex: 5 Common Mistakes to Avoid in 2025

Becoming a trader is not difficult, but becoming the top 5% of traders who can make sustainable profits in the market is a challenge. In 2025, the foreign exchange market will have many surprises as global central banks are dealing with tariffs from the US while also having to control stable domestic economies. Therefore, big fluctuations can occur and bring traders countless opportunities.

So how can a new trader improve and trade better this year? Let's join CPT Markets in revealing 5 traps that new traders often fall into in the article below.

Lack of clear trading plans ​

As a new trader, analysis is also a difficulty for you and requires a certain amount of time to practice smoothly. So the lack of a clear trading plan is unavoidable. Many people try to improve it by copying or learning other people's trading plans. But after a while they get overloaded, there are new traders who have many different trading systems but cannot use them effectively.

Furthermore, not having a clear trading plan will make you more susceptible to FOMO when trading, making your trading many times more "greedy and fearful".

Meanwhile, mastering a trading system is 10 times better than randomly using 10 systems. So start with a trading plan that you really understand, don't copy it mechanically, try that strategy with a Demo account first. After you have positive results, applying the plan you know to your Live account will help your psychology when actually trading much more stable.

Having unrealistic expectations when trading

Many new traders often want to double, triple, or even 10x their initial capital as soon as they enter the market. They often have expectations that the market will act in their favor. However, the market does not care about those expectations.

False expectations can lead to blind confidence, which can lead to fear and losses later on. Worse still, you may develop a revenge trading mentality after such a mistake. So to avoid illusions when just starting out, you still need to have a specific trading plan, including risk management.

In addition, CPT Markets tips you that with just 2%, 3% or 5% per month, you can be in the top 5% of successful traders in the market. Do that consistently for 10 years and you will be in the top 0.1%. Remember, trading is a business, not an online lottery!

Mistakes when Overtrading

Whether you are a short-term, medium-term or long-term trader, overtrading can happen often. Sometimes you have just finished 3 winning trades in a row and you say to yourself “this 4th trade will be a similar winner,” and put a lot of capital into that trade. In case the market goes against your prediction “gently”, you will still lose some profit from the previous 3 trades. But when you risk too much capital, you will lose all the profit or even burn your trading account if you use leverage incorrectly.

So treat every trade as a completely new one, you can't predict the future, you can be wrong and because the market is constantly changing, always try to make every trade you make the best one you can.

You can tell yourself “If you don’t trade, then don’t trade, if you do trade, then you have to win”, although it won’t make all your trades a winning trade. But it will make you much more careful before deciding to enter a real trade.

Using leverage inappropriately

Using too much leverage and placing orders that are too large for the capital available in the account is the main reason for wiping out trading accounts for new traders. Many people think that the higher the risk, the higher the profit.

It is true but not for new traders. An experienced trader can open a separate account and use the entire margin for his trade and make a big profit. But it is not an easy thing that everyone can follow.

Losing all your capital after a trade will be a painful lesson for traders when they first join Forex trading, and we don't want you to experience that.

To not lose capital even if you mistakenly enter the order volume, always set a Stoploss for each of your trades. It is the safety belt, protecting you when the Forex market goes against your initial prediction.

Psychology when trading is not stable

A trader with a good trading psychology is usually a trader who has gone through the ups and downs of thousands of trades. There are only a very few people who are highly disciplined when they first start. However, you do not need to go through those emotions to develop your psychology.

Be very careful and meticulous from the beginning, right from when you first learn about Forex. Always follow your trading plan and use leverage appropriately.

Most successful traders will say “trading is a boring job”. It's boring because they are very focused on discipline and having a clear plan.

You won't succeed in 1 or 30 days. If it were easy, everyone would do it and no one would bother to read this article. Therefore, change slowly, get used to the challenges in trading and most importantly, you must have a strong belief in yourself. Only then will you have enough motivation and patience to continue on the journey to conquer success in trading.

We hope that this article has brought you useful experiences when first starting out in Forex trading. The above can be applied to all markets if you aim to become a top 5% trader with high income from the market.

To minimize risks and maximize trading advantages, we have a Welcome Bonus campaign for customers experiencing the service at CPT Markets for the first time. You will receive an additional 30% of the first deposit amount, giving you more opportunities when making your first mistakes. Don't hesitate any longer, we are always here to support you.