What are the top reasons Forex traders fail:
That is a trillion dollar question and yet the answer lies in the simplest changes we can implement as Forex traders. There are so many factors that contribute to the high statistics of failure among Forex traders, just to name the few top reasons Forex traders fail, I have compiled a list below, it is not something new, you have probably read about it a thousand times before you read here,but still you have failed a thousand times, learning never stops, we keep learning every day as long as we are in this Forex market which keeps on changing.
- UNREALISTIC GOALS:
Forex trading is a business just like any other business, it has its highs and lows. Big banks and successful professional traders do not aim for 200% return in a month, but retail traders do and that leads to disaster and failure.
- REFUSING TO ACCEPT LOSSES:
The truth about Forex market is that you will be wrong sometimes and be on the wrong side of things, it happens to all of us, we all have a losing trade sometimes, the problem is when we refuse to accept that. Traders are so patient in keeping the losing trades for longer periods instead of accepting that they were not right this time around, they keep holding on to a losing trade up to the point that it hurts their account, cut the losses and move on, there are plenty opportunities that the market might present later. Always remember that in this market, when one currency pair is in the fall, their other one is on the rise, opportunities are always there, all you need to do when you feel like you encountered losses for the day, walk away and see the next day, call it a day, never ever try to trade out of revenge to get back the loss, the market has a painful way of dealing with traders who are out for revenge.
- TRADING WITHOUT A PROPER PLAN:
By proper plan, I am not referring to your trading strategy, but a trading plan. You need to know exactly what you would do should you have strings of losses in one day, you need to plan ahead and know the currencies that you’ll be trading and which sessions you’ll be trading and so forth, that is the kind of planning I am talking about.I is highly impossible to run a business without proper planning and following up on your plan, failing to plan is planning to fail, if you are just trading without a plan you are selling yourself short and heading for disaster, it is OK if you are not trading everyday, it is not necessary , success is in quality, not quantity.
- TRYING TO BE CLEVER:
I love this one because so many times I tried to be clever, it all led to disaster. No one can corner the market. Without a doubt, the most expensive way to learn Forex trading is from your own experience and mistakes, but it really doesn’t have to be like that, if you are fortunate enough to have a Forex mentor who is not only teaching you but also sharing with you all the mistakes they went through, you should take advantage of that by making sure you do not repeat the mistakes they made, because believe me, the mistakes can be costly. No matter what everyone else does or say Forex trading is not a get rich quick scheme, it is definitely not for lazy minded, there is no need to use high speed, it kills.
- UNDERCAPITALIZED ACCOUNT:
I know this might sound contradictory, I believe success is not found in huge start up capital, if you can handle a $1 account you can do the same with $10 000 account, but the problem is when traders insist on trading large volumes with the account that cannot afford to, when traders refuse point blank to trade 0.01 but insists on trading 0.50 on a very small equity, that is where the undercapitalized thing come from, I think if you can’t handle the small lot size, please do add funds to your trading account so that you can afford to trade any lot size, after all, you are in business, if you feel like it is too small for you, do what you need to do, add more funds then trade your desired lot size.
- PROPER MONEY MANAGEMENT:
Using stop losses play a big part in money management, I cannot say this enough, know the costs, know if you can afford to open more positions, do not risk too much, calculate your risk. I have gone through everything mentioned above. Thank you for stopping by and reading my post, if you find it helpful please kindly share using the share buttons below.