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.
I kid you not! I saw someone trading a 20.00 on a micro account. I didn’t even know it was possible.
Traders can be very strange Zim.
Hi my sister,if u first talk about reading because the market changes all the time,I get touched because I only like to read if that article is written, simple and strait forward,if not I don’t read it at all.I don’t know, I might be wrong but that what I do.Because if see that what I’m reading is complicated,I don’t waste my time with it,that is why I will need u as my mentor to hold my hand and take me through to Forex Market.
When u talk about UNREALISTIC GOALS,I don’t know where I stand,because I don’t aim for any percentage which I should obtain,could be day,week or month,I just trade what ever I feel like on that day.I don’t even check how many pips I made or lost on the day.Losses are big problem,I think in this case,I don’t stay on line whole day.I only do my pending orders on my 1hr time frame and close my laptop.I only check my trades during the day,and close those who are not positive.But still when I check my trades in the afternoon,I find too many losses.
Proper plan,really I don’t know anything about it,all I can say,I only do my trades during London & US sessions.But if u ask me what time those sessions starts and finish,I wont be able to tell u,because I don’t know.Whether my trades are quantity or quality I don’t know.Small or big account to me is not a problem because I always make sure that I only use sizes which are needed by trades on the day,sometimes I just go for half of what is needed.
My sister, I’m very happy to have mentor like you.
Wow my brother you have read and yo have said a mouthful,thank you,it is people like you who makes me to get up and write.You have mentioned something about not knowing when sessions open and close,i covered that on my previous post:BEST TIME TO TRADE FOREX,kindly read it, you will understand the opening and closing times using our local time.
One thing I like about Forex. It teaches us discipline everyday.
In order for one to be a successful trader, discipline must be your best friend.
Hi Ntombi, thank you for this article. I see it was posted in 2015. I am new in forex trading. Just started 2 days ago. I don’t have a plan. I traded as a test drive and luckily I managed to make 20% yield out of it. I would like to take a serious and more focused approach in this arena. You mention a trading plan and capital in your post, would you be kind and send a practical example of a forex trading plan, ofcourse if that’s not going to hurt. Also, perhaps if you have any documentation on the best combination technical analysis indicators for forex trading. I will really appreciate my sister. Thank you in advance.
Hi Thami
Thank you for your comment, you can find trading plan on this post: https://learnfxtrading.net/forex-trading-plan/. And you might find the following posts informative as well: https://learnfxtrading.net/how-much-trading-capital-do-you-need-to-start-with/ in terms of trading capital (how much you can start with) and also how can you set your monthly profit targets, read here:https://learnfxtrading.net/much-can-make-forex-trading/, regarding your last request, I am not a big fan of Technical indicators as my method of trading requires more of me understanding the economic factors. Please subscribe to this blog for future posts, new blog post to be published later today, I will share the method of trading that I personally use. Thank you for reading my posts.
Thank you so much for your post it has really helped me as i did not understand the sesions in the market.
I am in need of a personal forex mentor can you recomend any in pta.
Hi Frieda
Thank you for stopping bye and for your comment. You might also like the following posts:
https://learnfxtrading.net/best-days-to-trade-forex/
https://learnfxtrading.net/london-session/
Hi Ntombi can i have your contact number?
Hello Sherperd
+27 76 966 9392, it is also my Whatsapp number.