Crucial Forex Trading Lessons I’ve Learned After 10 Years Of Failure

The best forex trading lessons are brought to you by trading. Such learning is not free and can cost a fortune indeed. Today we share our experience to help you on your way to forex profits.

Key Takeaways🔑

Overbought and oversold levels are not always reliable indicators for long-term trading.
The 200 EMA is a powerful and often-used moving average for identifying trends and potential entry points.
Less is more – focusing on fewer trades and a smaller number of indicators can lead to better overall results.
Trading on a demo account is helpful, but eventually, you need to trade with real money to develop a true understanding of trading psychology.

How do I learn to trade forex?

Have you ever wondered why 90 percent of traders lose money while trading? If the answer is yes, then don’t worry, you’re not alone. In fact, almost 80 percent of traders quit in their first two years of unsuccessful trading.

The harsh reality is that trading is not easy. With that in mind, you as a trader must know exactly what you’re doing if you want to stick around in the game for the long term.

Worried that you may not have what it takes to be a long-term trader? Well, I was once a beginner trader too, and here are the crucial forex trading lessons I’ve learned after 10 years of failure!

5 Real Forex Trading Lessons Straight from Experience

These forex trading lessons are not something like a forex trading course online. It’s a set of some subjective tips to help a beginner overcome common problems on the way to profit from forex trading.

Overbought and oversold levels are not reliable in the long term

The first trading lesson I learned was that overbought and oversold levels are not always reliable in the long term. Don’t make the same mistake I made, believing that I could rely on these indicators 100% of the time, especially for the long-term.

stoch in overbought and oversold areas

When I started trading, I took the advice I read in different books about the overbought and oversold levels. And you know what? The majority of the books taught me that if a market reaches overbought levels, that means there are too many new buyers on the market. Thus, prices should go lower. Conversely, if a market reaches oversold levels, that means that there are too many sellers on the market, which leads to an increase in price.

This seems simple enough to understand, doesn’t it? The thing is, as a beginner trader, I didn’t realize that it wasn’t as simple as that, after all. I lost a lot of money due to the fact that I didn’t realize immediately that just because a market is overbought or oversold does not mean that the prices will immediately reverse in the opposite direction.

Just take a look at the chart above, where the prices didn’t immediately reverse. And still, many traders believe that as soon as the RSI or the stochastic indicator hits or exceeds values of 70 or 30 they should enter in the opposite direction.

This is simply the wrong approach. There are times where the market remains in the overbought or oversold areas for days weeks or even months. During this time, they can continue to go higher or lower. What happens if you enter a position assuming that the trend will reverse, and it doesn’t? You lose, obviously.

Remember, for every valid overbought or oversold signal offered by these indicators, there are 10 other false signals that you should be wary of. After years and years of that, I learned that chasing overbought and oversold levels is simply not profitable.  I’ve personally stopped watching these levels a long time ago and I’m much happier with my current strategies.

200 EMA is the only moving average needed on charts

Let me ask you if this sounds familiar. You plot 5 or 6 indicators on your chart. After a bad week, you remove those indicators and see what happens next. You then replace them with new indicators. If they turn out badly again, you repeat the cycle once more the next week. Eventually, it becomes an endless cycle of trying different indicators all at once.

One of the crucial forex trading lessons I’ve learned is that the 200 EMA was the only moving average I needed on my charts. In fact, once I started focusing on it alone, my trading improved a whole lot.

It turned out that the 200 EMA is very effective during trending periods. I learned that it’s an important tool for identifying trends, establishing potential areas of dynamic support or resistance, and accurately speculating good entry points on the market.

Why is the 200 EMA so reliable in technical analysis? Well, many believe that institutions like banks or hedge funds actually use this indicator for trading. And I can personally say that if we take a look at this EMA on any currency pair, commodity, or even cryptocurrency, we can immediately see its value.

Less is more

Another lesson I learned was that trading more sessions won’t accurately predict how you will actually perform when trading with real money. There isn’t a simple and obvious way to tell how good you are at trading without looking at how much you’re actually earning. Even if you win a lot of trades, if you lose even more trades, then you’re still at a loss.

In line with this, I also learned to be more careful about my trades on the demo account. Before, I thought that just because I wasn’t losing any real money, I could just trade as carelessly as I wanted. But it turned out that I wasn’t learning that way.

Money prize
At some point, you need to trade with real money

When you’re trading on a demo account, you tend to take more risks. You tend to care less. So you make more trades. Maybe you win more, but you don’t realize that you’re also losing more.

However, when you’re trading on a real account, you’re actually risking real money. There is psychological pressure for you to win because it’s real money we’re talking about.

My suggestion would be to not focus on the demo account too much, and not to be too careless with it. Once you can already do your chosen strategy flawlessly and can already manage the capital you have in your demo account, you should start trading on the real account with real money.

Don’t trade big money though! Start small. 1-dollar trades are good enough for beginners. After all, you can always work your way up from there.

Losing money is in fact a good thing

This will probably be the strangest and paradoxical of today’s forex trading lessons. Trading may not be easy, but you should always treat it as a learning experience, no matter what happens. Think about it this way: if you win, you gain more money. But if you lose, you may lose some money, but you do gain more experience.

Losing isn’t fun, but it’s very important for a trader’s development. Through losing, you learn about so many things that you may not be aware of before.

forex trading lessons

Don’t get me wrong though, most people, including you and me, probably find losing unpleasant. But remember, while it’s not enjoyable to lose money when trading, in the end, you will learn more from taking a loss than from winning a trade.

The important thing when you lose money is to learn from the experience and not do the same thing again. You get an education for that lost money and you come out a little smarter in the future. Believe me, once you learn how to change your mindset towards losing, you’ll find that there’s actually a lot to be gained from it.

For one, losing now can help you avoid a much larger future loss. You can adjust your strategy and find one that will actually match your personality.

In my case, when I was still a beginner trader, I found an online course that was teaching scalping.

They claimed to have a high success rate, so I decided to try adopting their approach. After a couple of weeks, I was down by 20% in my account. It didn’t matter if the other people who apparently did the same course saw an increase in theirs. What mattered was that the strategy, which was apparently high-success, didn’t fit my personality.

Why didn’t it fit? Well, scalping is a fast-paced trading style. Even if their exact trading strategy worked, I wasn’t good at monitoring the price action very closely, nor was I fine with sitting all day in front of the screen. Because of this mismatch, I ended up losing a lot of money.

My advice for beginner traders is to find a strategy that matches your own personality. How much risk can you tolerate? Are you alright with trading the whole day? What time frame is suitable for you? Are you a day trader? A swing trader? A position trader? A scalper? Do you prefer doing technical analysis or fundamental analysis?

By answering all these questions, you’ll learn more about yourself and avoid losing in the future.

Preserve your capital

These forex trading lessons would’ve been all worthless if I didn’t learn how to preserve my capital.

In fact, I daresay that preserving your capital is the most important tip that I could give to beginner traders, after battling loss after loss after loss in my 10 years of trading forex.

different ways of capital management
Preserve your capital

In the beginning, my goal was only to gain huge profits in the shortest amount of time possible. So I would take big risks, hoping to get big returns. Obviously, that didn’t always happen. I lost more than I earned, simply because I wasn’t being careful enough.

After a while, I learned that the better strategy would be to focus on preserving my capital rather than winning huge profits. When I finally took on this mindset, I noticed a vast improvement in my trading results. I soon learned that successful traders concentrated their efforts on how much money they could lose before thinking about how much money they could win. The key to making money over the long term is to simply learn how to stay in the game.

In other words, you need to preserve your capital so that you can stay in the game long enough to reap the rewards.

When I started trading, I had a gambler’s mentality, and I suspect a lot of you beginner traders have this mentality too. I focused almost entirely on how much money I could win, with almost no regard for losses. That’s why I lost so much.

Pros and Cons of Forex Trading📊


  • Access to a global market, allowing for trading 24 hours a day, 5 days a week.
  • High liquidity, which makes it easy to enter and exit trades.
  • Potential for high returns on investment.
  • Availability of leverage, allowing traders to control larger positions with smaller capital.
  • A wide variety of trading strategies and techniques to choose from.


  • High risk of losing money due to market volatility and leverage.
  • Requires a significant amount of time and effort to learn and master trading skills.
  • Trading psychology can be difficult to handle, particularly when trading with real money.
  • Many scams and unregulated brokers in the forex market.
  • Overwhelmed by numerous indicators and strategies, leading to analysis paralysis.

Forex Trading Strategies Key Characteristics
Price Action Trading Focuses on analyzing historical price movements to predict future trends.
Technical Analysis Uses charts, indicators, and patterns to identify potential trading opportunities.
Fundamental Analysis Considers economic factors and news events to evaluate currency strength and market direction.
Swing Trading Aims to capture gains over a period of days or weeks by holding positions for short to medium terms.
Scalping Involves making numerous short-term trades to profit from small price movements.

Is Forex Trading a Good Idea?

When you start trading, you shouldn’t be asking yourself when you’ll be profitable. You should ask yourself how you can trade while preserving your capital and what you should do to stay in the game one week, one month, one year, or one decade from now.

In short, you have to protect your capital while gaining market experience. Once you start gaining more and more experience, you’ll have more chances of winning your trades. Just don’t lose money, and you’ll already be ahead of 90 percent of traders.

Forex trading itself is an ongoing journey. It is a good idea for anyone who cares about their self-development. The skills you gain in this market, will help you with your business, help you to be patient and teach you to be systematic.

And those are the most important forex trading lessons I’ve learned in the past 10 years! During my trading journey, I’ve had lots of ups and downs. I still lose trades until now, and I still have doubts. But I’m continuously improving in my craft and I love what I do every single day. And I hope all of you beginner traders will, too!

Frequently Asked Questions❓

  • Q: How much money do I need to start trading forex?
    A: Most brokers offer micro accounts, allowing you to start with as little as $50-$100. However, it’s advisable to begin with a larger amount to manage risk more effectively.
  • Q: How long does it take to become a consistently profitable forex trader?
    A: The time it takes to become profitable varies depending on the individual’s learning pace, dedication, and trading strategy. It may take months or even years to achieve consistent profitability.
  • Q: Can I trade forex part-time?
    A: Yes, you can trade forex part-time. However, it’s essential to dedicate enough time to learning, practicing, and managing your trades.
  • Q: How can I manage risk when trading forex?
    A: To manage risk, use proper position sizing, set stop-loss orders, and follow a well-defined trading plan.
  • Q: What is the best forex trading platform for beginners?
    A: There are many platforms available, but some popular options for beginners include MetaTrader 4, MetaTrader 5, and TradingView. Choose a platform that suits your needs and preferences.


The financial products offered by the company carry a high level of risk and can result in the loss of all your funds. You should never invest money that you cannot afford to lose.
Kindly note that this article does not provide any investment advice. The information presented regarding past events or potential future developments is solely an opinion and cannot be guaranteed as factual, including the provided examples. We caution readers accordingly.

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Bart Bregman

Author / IQ Option expert: "My name is Bart Bregman, I have 9 years of full-time professional trading experience. I've been trading with IQ Option for more than 7 years, mainly on the shorter time frames doing technical analyses, and have many experience with Binary Options, CFDs, Options, and Crypto trading. There is no such thing as a bad trade! As a digital nomad trader, I'm mostly traveling all over the world. Follow my journey on Instagram at "

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