I think traders actually fail for a huge variety of different reasons, of which the “Big Three” (although they mutually overlap to a considerable extent) are probably …
They never actually develop a system/method which has a genuine edge (positive net expectation) in the first place;
Undercapitalisation and excessively risky position-sizing;
They don’t have, or develop, enough judgement/discrimination to decide by whom to be guided.
I think the first two of those “Big Three” perhaps fall under the more general heading of lack of education/understanding about the statistical and probabilistic realities that necessarily underlie all successful, profitable trading, while the third probably relates more to the nature of the industry itself, the people it attracts, and the fact that the failure-rate with all forms of attempted self-employment/business is pretty high, and misinformation and misguidance (some of it actively incentivised) is all over the place, especially online where there’s absolutely no quality control over publication.
I think because the forex is a play, although they are more experienced than us (I am not a trader) the can loss as well, of course, less than us.
The think is to find a trader with best records, looking for My fxbook or fxstat,
Focusing on both the money making and the trading aspect goes hand in hand. Thus, one should always focus towards the trading business aspects which can make them win in the forex market.
I have read a lot of threads and I keep seeing post saying that scalping is the worst possible trading strategy does anyone know what scalping is and whether this is true?
I think a lot of newbie traders fail because they get lucky with scalping when they begin, they leverage to much and when one trade goes sour they lose all their capital due to the leverage. What new traders need to do is spend time on demo accounts and develop trading strategies that work for them, through trial and error on demo accounts. The next step is to set up a micro account with a reputable trader and AVOID using leverage until they have acclimatized to the emotional pressures of live trading.
This article might be useful for new traders How to position your trades a practical guide. – forexforceblog
Scalping is certainly the most favorable trading pattern for most of the emotional traders and not all can win over this trading strategy and there are thus more chances of losing their hard earned money to the forex marker. We need to plan and then trade to succeed.
Trader fail usually because of the same reasons. Most people don’t threat trading as a profession, and when you don’t threat something as a profession you simply cannot be a professional. In addition to what you mentioned about being emotional, and the lack of education, many traders can fail by choosing a wrong broker or due to a lack of proper money management system. You can have be self disciplined, have a winning strategy to enter or exit the market, and have the best broker. But if you don’t have the basic understanding of how to apply a good money management system you will lose for sure. And this is in my experience the most common reason for trader’s failure.
Or closing too late, for that matter. The amount of times I’ve been at a profit and I decided to wait for more because I was too greedy, only for the price to retrace, I shudder just thinking about it.
While market knowledge is the critical aspect in the forex trading business, traders should learn the account management to survive in the forex market.
It is a fact that traders are not doing their trading with good knowledge and the results is that the income they are getting in their trades is not stable at all
That is correct. But the real problem is that most of them do get a knowledge, only not the one they really need. Spending too much time searching for the perfect entry and exit signals. HUGE mistake!
Being active in trading does not mean playing every poker hand the market deals.
It is simply naive to play weak hands or too unpredictable market ranging periods. Playing during these crazy market times will surely become a losing battle.
Stay on side line and wait for better hands or high probability entrances instead.
For example:
Let’s say one plays every hand and win 50% off the time because one is playing by luck. To make money, one’s winnings need to be more than one’s losses, meaning rewards must be greater than risks. But there is no law that will align your wins with the best risk reward. Therefore, playing by luck is a no-no.
Yes, the market is basically a poker game. That is why it is a skill game and not a luck game.
Take time to learn the game. Play happy and best wish for all successes.
Many beginners just want to start making profits from the first day without acquiring the basic knowledge.Also they can’t control their greedy and emotion.Patience and Practice!!!
