How to succeed when so many fail. The root cause

Beginner Questions Trading Psychology
111

And need to work with the own trading mistake very keenly.

112

Very informative, amen to this

113

That’s true, the learning part is vital. But most of the times, people jump that step and start to trade directly, paying harder for it later!

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i think traders should not to change current trading approach until having a bog losses.

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Thank you so much. This just help my spirit revivedđŸ’Ș I can still make something substantial

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Trying to overcome human nature isn’t simple. Some people follow a good strategy in this case. They simply use set and forget method. They set their trades based on pending orders or market orders, and they turn of the computer. This however is wise if you have stoploss and takeprofit in place. Spending more and more time by the chart makes you decide unwise. You can decide if you must buy or sell or not enter with just 20 minutes spending time on a chart. When you master yourself, you can master forex.

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That’s the best thing I have read today.

118

Never giving up is the key to success.

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The reason for the failure lies in a simple truth: we were taught by parents to be like that. Like everyone else. No different. Work like everyone else from 9 to 18. Make money like everyone else. With suspicion to look at people who, in our opinion, have reached heights. But we think little about the fact that all successful people work very, very much. They spend a lot of time on self-development, on their own projects.

2 Likes
120

that’s a fact

121

To be success-full in Forex all you need is Experience and skills to trade in such a market where anything can happen in a mint. Best way is to spend time understanding the strategy and applying on right time.

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The root cause of failure is lack of knowledge. Most people that get into forex trading think that forex will make them earn alot of money easily which is their biggest mistake. They do not learn about forex properly before they begin trading. Their strategies are just pointless and they lose all their money.

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Having a great deal of knowledge never stopped anybody losing money in the markets.

Remember those clever guys from LTCM? Including 2 Nobel Economics prize winners. They still blew up.

124

Thanks for sharing this thought, you got the exact how to rise from defeat.

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Lovely members in this thread have well said. The reason why some of us failed is because of -

  • Poor knowledge
  • Lack of Skills/Experience
  • Impatience
  • Easily giving up
  • Emotionally unstable
127

Why do most of forex traders always lose money?

This is a very well known fact that more than 96% of forex traders continuously lose money until they rip their accounts off with negative balance. The most common question amongst traders is why do most forex traders lose money?

Trading forex is one of the most difficult jobs/businesses you’ll ever hop on to make a living. Now, you may be thinking that why is an endeavor that is just based on buying/selling so difficult? How is it possible? Well, it’s not just buying and selling. There are tons of other factors too that set you up for success and failure in the foreign exchange market.

” THERE ARE A MILLION WAYS TO MAKE MONEY IN THE MARKETS. THE IRONY IS THAT THEY ARE ALL VERY DIFFICULT TO FIND. “

Let’s start with a few key statistics, from online educational resource Tradeciety:

  1. 80% of all day traders give up within the first 24 months;
  2. Among all traders, nearly 40% trade for only one month;
  3. Within three years, only 13% continue to trade. After five years, only 7% remain;
  4. The performance of the average individual investor is down 1.5% per year;
  5. Active traders underperform by 6.5% annually;
  6. Traders with up to a 10 years negative track record of forex continue to trade and keep losing money forever.

The last point/statistic suggests that traders belonging to the group that has experience of losing money for 10 years, still keep trading; in fact losing money once and for all.

Now, let’s come to the factors which cause such a huge number of traders to fail.

The Battle of Judgement & Over-Confidence

There are two kinds of people in forex trading when traders’ perspective about them comes to a count.

1- The Judgemental Ones

Traders of this category are way too insecure and think of forex trading as a giant alien who just landed on earth and got out of control and they are unable to deal with it. They judge themselves and have a certain fear in their hearts and minds. The fear to lose money; the fear of failure. And they are too fragile to fight this fear of theirs.

Building a successful forex trading career is less about judging the price of a certain pair. What matters the most is emotional management. How do you deal with your fears? How do you celebrate your successes? Emotions build the foundation of success in forex trading. If you can’t handle your fear well, you’re set to lose. SO you need to tell yourself, YOU CAN DO IT!

2- The Wolves of Wall Street

Traders in this category take their confidence in themselves and their trading skills too far. The difference between confidence and overconfidence is as slight as a thread. Which side of the thread you’re standing right now makes all the difference between you being a loser or a role model in the market.

But the traders in this category are those who watch “The Wolf of Wall Street” or “The Big Short” once in their studio apartment at Inwood or Windsor Terrace, New York City and they believe they just cracked the code of the market can turn the market whenever and however they want. And this is where the downfall of their bank account and credit card begins. They take every trade like the market has no balls to go against their positions and 5 trades later, the margin call from their broker is what wakes them up from their dreams.

The Misguided Approach towards Forex Trading

Before actually starting forex trading, almost all of the forex traders are told that forex can make them rich overnight and within a couple of days, weeks or months, they ‘ll be out there at the Malibu beach with their fantasy Hollywood star, partying on the rocks under the stary moon and around the crackling bonfire. Well, that’s possible if you’re nephew or niece of Jamie Dimon which you’re definitely not.

Not only they are told that the forex trading is just another legit get rich quick scheme, but they are misguided about the ways to make the said money too. Like, they are never suggested to actually learn how to trade the market, but they are directed to use the effortless shortcuts like indicators and ready-made best strategies and all that kinky stuff out there. Having said that, we’d like to clear a few points here;

  • Trading indicators are nothing but full of dog ■■■■. Sorry for the language but we had to say this.
  • There is no one best strategy for every trader. After all, not everybody likes or can digest that banana shake full of protein and calcium.
  • Forex trading is absolutely NEITHER a get rich quick scheme NOR a scam. It’s just another business that involves high risk and high rewards.

Double-Edged Sword;The Lack of Patience

Let’s move out of the trading for a moment. What trait do humans lack the most nowadays? Patience , right? Whether they’re commuting from home to work, or they are arguing about something with their colleagues or juniors, walking their pet down the road or trying to make a point about a certain point with their children, people lack PATIENCE. This is the most common reason why most forex traders lose money.

Now let’s correlate this with trading. Let us show you how all the traders with lack of patience react to different price movements with a little visual aid;

Whether they are entering long or short, their trades are in profit or loss, they always react with a truckload of emotions to every single price movement. If their analysis tips them off for a buy signal, they enter with a target of 50 pips profit, and the trade goes in their favor, they start panicking and worrying if the trade will keep going all the way to their profit mark or not.

Now what they usually do in such situations is that they hit the “close with x profit” and boom, right after they close the trade, the pair starts dancing and crosses their target but Alas! They’ve already got out of the position. And this regret makes them ready to take more risks and wait more next time. But they just can’t hold it. They can’t be patient.

They keep repeating that. Their losses keep increasing and their profits keep getting narrower and narrower. And one fine morning, they are on the list of their broker’s margin calls.

Now just imagine If 90% of the traders don’t have patience, what would happen if you develop patience? This one fine trait of yours will set you apart from others and will make your way to the top. The time you spend finding that A+ setup and effort you will put in stopping yourself from entering that not so good trade, is what will make all the difference.

Trading forex is a journey. A journey or a process that never ends. Love the process and you’ll be there in no time.

The Lust of Money Rather than The Love of Trading

According to the statistics, more than $6.7 Trillion exchanges hands every single day in the Foreign Exchange Market. This is a very huge number. So huge that the estimation of the USA’s total revenue for the fiscal year 2019 was $3.438 trillion. That means, nearly twice the budget of the United States of America is traded every single day in the Forex Market.

Now, everyone in the forex market wants to have a piece of this giant pie. There is nothing wrong with wanting to make some money. After all, its the most important thing we need to stay alive. We can’t afford anything without money. But when making more and more money is the only motive of trading forex, it causes a very serious problem. It makes a trader impatient which is fatal for every forex guy down the block.

This lust of money gets into the one factor that you cannot control, yet can prevent you from becoming a successful Forex trader. What is that one thing? Passion! That burning desire that pushes you ahead after each blown account and refuses to go away regardless of how many times you’ve fallen. It’s a love for forex trading. And being crystal clear to you, we cannot teach it to you. You either have it or you don’t. There is no middle way.

” IF YOU DON’T ABSOLUTELY LOVE TRADING, YOU WON’T SUCCEED. ”

Conclusion: Why most forex traders lose money?

There’s no single answer for why most Forex retail traders fail. It’s a combination of factors that affect each trader differently.
However, the four aspects above are at the top of our list. Some are more obvious than others, but each plays a critical role in the road to successful Forex trading.

128

Everyone wants fast money and nobody wants to work. That’s why they hustle and bustle and do a lot of reckless actions, and then complain that trading is a game and it’s impossible to make money here! It really pisses me off personally


129

For some reason, everyone always discusses that there are few successful people in trading. You would think that in other types of business everyone achieves incredible results. It’s the same. There are always those who achieve results and those who stay with nothing.

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perseverance is key

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Do not focus on what others are doing, just focus on your strategy and trust your skills.