I know it is cold comfort but there is some consolation in knowing you are not alone - actually far from it! Concrete evidence of this is found on the home pages of every ESMA regulated broker who are obliged to publish a statement that typically reads like this:
" 70.24% of retail investor accounts lose money when trading CFDs with this provider".
So you can believe that it is NOT down to personally - but this is the paradox in forex. Because, in fact, it is also entirely down to you personally! What I mean is:
Spend a few years on this site and you will soon see that new traders come in all shapes and sizes from all over the world from all kinds of backgrounds and with all kinds of abilities and potential - and yet this one statistic published by the brokers themselves shows that this hugely diverse sub-section of the human race nearly all consistently end up in the same graveyard!
Why is this? Well, spend time on this site and you will see that there are countless threads that are either entirely devoted to this question or at least touch on it at some stage. And the answers are always the same.
Most traders are TA based, either totally or proportionately. All traders also know that markets can only go up, or down, or stand still. What can possibly be easier than using TA to tell which way it is going, up or down, and go with it! And yet over 70% (probably more) cannot do that “simple” task! So the question why is extremely relevant.
The simple reason why so many diverse people end up in the same hole is because they all go through pretty much the same process.
Most newcomers search for a method/system/strategy that works. They try one and when it loses they jump to another one…and another one. They spend their time analysing their system to “correct” its “failings”. They will add a new indicator here, change the settings on another there, up the TF, down the TF, and so on.
You can see for yourself how, whenever anyone starts a new thread for another “Free trading system”, it starts with a lot of posts from enthusiastic hopefuls, then come the suggestions for improvements and add-ons. And soon the original system has become unrecognisable. The process is based on the concept that every time it loses bolt on another filter to prevent it happening again.
But this process has one underlying flaw in its logic. Markets are not homogeneous. They do not move in smooth sine waves with consistent acceleration/deceleration rates and equal durations. Every move on every pair is like a snowflake, similar but unique. And no system can ever be good for all conditions. All the tampering does is fit the current curve - until it no longer fits.
It has also been proved statistically by brokers themselves that, contrary to commonsense, most losing accounts actually win more than 50% of their trades! How can this be so if the method is working and yet the trader is losing money?
The answer has been posted here consistently by so many experienced traders. The factors determining success in trading is in you, not in your system. We all need to spend time analysing what kind of trading we should be doing, how we react to wins/losses, and focusing far more on managing and protecting the health of our account rather than each individual trade. For example, how many traders put hands up when asked “Have you ever lost a whole week’s profits in just one aggressive, excessively large, trade?”
We need to know ourselves and we need to know our markets - and we need to learn when to trade - when not to trade and - when to walk away.
A novice driver and a veteran both drive the same roads - but the Newbie driver’s insurance is much more expensive than the veteran’s - why is that? The answer is not down to the quality or unpredictability of the road or the tuning of the vehicle - so what is left???