1. Scams and fraudulent practices:

The FX market has relatively less stricter legislations and regulatory mechanisms across jurisdiction differs. So, one can easily fall prey to scamsters and frauds. It is upon investors to ensure that their forex broker is a licensed one, works with large financial institutions and offers the best rates. Herein private and official sectors need to be instrumental in promoting the best ethical standards and practices.

2. Political uncertainty:

There are times when a country's ruling government abruptly changes its laws and policies that affect international trade or some political crisis looms. Such developments can have an adverse effect on investments.

3. Overtrading:

Trading involves pattern recognition and the premise for scanning a trading opportunity is an invariable one. If you have a couple of bad trades it's best to stay out, reanalyse your strategy and review your performance. Overtrading is a dangerous mindset that can lead to insolvency and you may end up losing more money than you can afford to. One must know when one has a trading edge and when one doesn't. It's best to develop a low-risk long-term strategy that can bring you steady profits.

4. Having unrealistic expectations:

As a beginner setting out to trade it is foolhardy to expect an astronomical trading income. A novice should focus on his/her particular trading approach and how he/she can improve in future. Excessive greed won't bode well for your trading graph and will only lead to losses and frustration. Testing your techniques, developing your own unique trading style & sticking to it and carefully assessing the markets before trading will ensure good results.

5. Low confidence:

You should be confident enough in your capacity to execute trades and succeed. In order to do that you must always back-test your trading approach to assess whether it accrues good returns and evaluate your lifestyle in order to see whether it maximises your performance. Despite that if you do not taste success then you must change your approach and deep-seated habits so that you attain unprecedented trading success.

6. Lack of trading discipline:

With all the information overload nowadays, traders are susceptible to trying out newer strategies each time they face losses. But that is only for the short-term till they face another couple of losses and the process gets repeated. Traits like closing a trade prematurely, not locking-in profits, not putting a stop loss shows an acute lack of trading discipline. Committing mistakes in your trades is normal, but it is important to note down your errors to avoid them in future and review your performance from time to time.

7. Not having a clear-cut strategy:

Due to the multitude of trading strategies and risk management techniques available in the market today traders often get confused about where to start and what to expect. Trading is a lifelong learning process not a hit-and-miss gamble. So, you need to sift through the overwhelming mine of data, identify your own unique style & what works best for you and then steadily build upon it.

Thus, by keeping a healthy perspective, a viable strategy and a positive mindset anyone can enjoy the perks of trading forex.