The 10 Mistakes Beginner Traders Make#

According to France's market regulator, the AMF, 89% of retail CFD traders lose money. The good news? Most of those losses come from avoidable mistakes. Here are the ten most common.

1. Not using a stop loss#

The stop loss is your insurance against catastrophic losses. Without it, one losing position can wipe out weeks of gains. The golden rule: always place a stop loss BEFORE entering a position.

2. Overtrading#

Trading too often, usually out of boredom or excitement, multiplies both costs and mistakes. The best traders are selective: they wait for high-probability setups and take only two to five trades a week.

3. FOMO (Fear Of Missing Out)#

Buying because "it's going up and everyone is talking about it" is the surest way to buy the top. By the time an asset makes headlines, it is often too late. The market will always offer new opportunities.

4. Trading without a plan#

A trading plan defines your entry criteria, your exit criteria, your risk management, and your objectives. Without a plan you are not trading — you are gambling. Write your plan down and follow it rigorously.

5. Overusing leverage#

Leverage amplifies gains AND losses. Leverage of 10x means a 10% decline wipes out your capital. European regulators (ESMA) cap leverage at 30x for retail clients, and not without reason.

6. Ignoring costs#

Spreads, commissions, overnight swap fees... these "small" costs add up fast. A scalper taking 20 trades a day with a 2-pip spread pays the equivalent of 40 pips in costs every day.

7. Emotional trading#

Fear and greed are the trader's enemies. Fear makes you cut your winners too early; greed stops you from taking your losses. Build a mechanical process and stick to it.

8. Not keeping a trading journal#

Without a journal, you cannot identify your strengths and weaknesses. Record every trade: the reason for entry, the emotion you felt, the outcome, the lesson learned. Review your journal weekly.

9. Revenge trading#

After a loss, the temptation to take an impulsive trade to "win it back" is strong. That is the start of a destructive spiral. After a loss, take a break. Come back the next day with a clear head.

10. Not diversifying#

Putting all your capital into a single asset or a single sector is extremely risky. Diversify across asset classes, sectors, and regions to reduce the overall risk of your portfolio.