Blowing accounts

Beginner Questions
1

What is the one thing that causes most traders to blow their accounts?

2

overtrading and over leveraging

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3

Non-acceptance of a trading mistake as well. Hopes for recovering.

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4

If you look under beginner questions new topics you’ll see theres already a topic in this starting with ‘top 20 problems faced by forex traders’… by seanlee009.

If you read a bit more instead of starting new topics in the long run you’ll learn more. And you wont spam the new topics tab. Thanks.

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5

stupidity.

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6

Too large lot size, not placing SL, Grid, Martingale.

Basically it’s all about wrong money management.

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7

I’m a beginner but already this is exactly what is killing me slowly😌.

8

There are several ways to blow the entire account and numerous reasons. There are two popular situation:

  1. Few large losses. Trader can blow his account just in a few trades if he pays no attention to risk management rules or his leverage is too high. To avoid this, trader shall develop detailed risk and money management rules based on his account size and risk attitude and than act strictly in accordance with such rules. It is also important to reduce the leverage to the lowes available.
  2. Dozens of small losses. Trader can lose money slowly but consistently if his trading system has a mistake and there is no way to earn money using it. If the row of losing trades becames too long, it seems that trader is doing something wrong. The best solution in this situation will be to suspend trading and check the strategy and all its elements againg. The most simple and fast way this is backtesting with the help of special software like Forex tester something like that. Sometimes strategies are no longer efficient due to the changes that took place at the market, so it is necessary to analyze the performance of each strategy from time to time. The problem could also be in the lack of discipline. For example, trader can make emotional trades or hold losing trades too long. It is important to figure out certain mistakes leading to losses to avoid them in future. Only after this trader will be able to trade again.
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