Why forex traders lose money?

Why forex traders lose money?

In the era of high technologies and financial prosperity, many people dream to earn more and do less. Many of them are qualified specialists. They are ready to take risks and in chase of profit try to work in the forex market again and again. But why do some people succeed in their deals and others lose constantly?

Statistically, about 90% of traders incur losses and the 10% become really good forex brokers. What do the last never do while trading?

The reasons of losses

  1. Perhaps, one of the crucial reasons why traders fail is that they have too little of self-control. They cannot resist the temptation of excessive trading and using high gearing.

  2. Traders try to go against trends for some reason, even if they know that according to analyses they have more chances to win by following a trend before its close.

  3. The rejection of failures and mistakes. Many people tend to shuffle off their blame on to somebody else. However, only a trader himself is guilty in bad trading. If you notice that you lose money with an enviable constancy, there is not your broker’s fault, nor the result of bad quotations or false recommendation, nor hardware error. There are no mysterious “they” who steal your money. That is why best binary options brokers always win, as they take full responsibility for their actions.

  4. Excessive trading or its absence during major time frames also leads to losses. Traders, who just jump in the market and go out full of emotions and avidity, suffer not only the quantity of lost deals, but also bear big spreads’ costs or commissions during a year. The secret of success is in self-discipline and patience. There are too many “noises” and “debris” among shallow time frames. So, if you want to improve your trading you have to go beyond your borders and start to work with bigger time intervals.

  5. Gambling. Many traders accept excessive risks: after several successful deals they want more and risk more and this leads only to the loss of what was won. This happens usually with those who do not know yet that they should take chances with the same amount of funds in every deal. Over-emotional people also cannot resist gambling. Forex is no poker. That is why a gambler never becomes a good trader: his way of trading is not one of the best forex strategies. The main point is in honing the skills to know what to search for in the market every time when switching on the trading platform. So, if a trader is confident in every deal, there is no reason to risk with bigger funds. They should be approximately the same in the ratio with the whole investment.

  6. Bad management or its absence during trading causes constant losses in money. Every trader after some practice can forecast a short-time market movement, at least to enter an open deal and receive some profit from it. Afterwards difficulties occur. Most of the traders have no trading plan how to manage positions. This plan of actions should be made before a trader enters the market. Besides he should also think over the exit. The more considered decisions are, the better work will be. The trading plan should be written and followed.

  7. An accidental entrance in the market. Every trader should work out a good reliable trading strategy to avoid fortuitous deals. If you start examining and using one strategy, stick to it and do not jump from one to another, because you will lose your time and money in the end.

  8. Expectations vs. reality. A trader expects sometimes too much and supposes that if his funds are 400$ he can earn twice more in a very short period of time. Or a trader may think that he is very experienced because he has higher financial education and he knows what and how to do to attract luck and profit. All these are vain dreams and have nothing in common with reality. Only practice and labor can make experience.

Everybody has the same chances to succeed. Every trader can make money in the market and enter the Forex Advisors Rating. If there is a trading account and incoming profit is constant (even if it is not big), it will lead a trader to success. The habits and succession of actions should be trained every single day.

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