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Why 90% traders losses their money in forex trading?


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Time and time again you’ll hear people say 90% of traders consistently lose money trading the forex markets.

With so many traders losing money across all types of financial markets it begs the question “What are all these people doing wrong” ?

This is the question I hope to answer today, we’ll start by taking a look at some of the things which are commonly blamed for 90% of traders losing money and try to decipher whether they are the actual reason for so many traders consistently losing or if there is something else which people are doing wrong ?

1. No Strategy

The Number #1 reason why traders fail is that they have no strategy.

A lot of traders don’t want to acknowledge this but the fact is they have no idea what they are doing. Their idea of a strategy is some combination of technical indicators that they have heard or read somewhere.


2. Insufficient start-up capital

Many new Forex traders are already starting on the back foot. They begin Forex trading because they need more revenue and hope Forex will be a quick and easy way to make large profits.
This is exacerbated by Forex marketers encouraging beginners to trade using high leverages by promising the potential of big returns for a small amount of initial capital.

3. Psychological Factors

It’s pretty shocking, but the fact is that more than 95 percent of traders lose their whole forex investment pot in the first six months2, as the market can certainly be unforgiving. Part of the reason why this is the case is that there are still some people who see forex trading as a get-rich-quick scheme. This has strong links to the feelings of both luck and greed, two things that can act as a psychological block to anyone who is new to trading forex.

4. Over Leverage

The fourth reason why traders fail is that they take trades way beyond their capacity.
I have seen traders with Rs.1 lakh of capital taking trades worth Rs.10 lakh and even Rs.15 lakhs. These guys want to get rich quickly and, in that greed, they take excessive leverage.

5. Financial Factors

Arguably, the biggest issue facing new traders is to simply comprehend the sheer size and complexity of the forex market. No matter whether you are trading part-time, full-time, or casually, the worst possible thing you can do is underestimate the market’s power, along with its varying levels of volatility. Commit to trading, strive to learn the ins and outs of forex, and learn to appreciate the potentially complex nature of what you’re doing.

6. No Emotional Discipline

The six reason why traders fail is that they have no emotional discipline.

They are driven by emotions rather than logic. In one single day, they experience all kinds of emotions: they get excited, they get impatient, they get frustrated, they get confused and yes, they become greedy and fearful.

7. Poor Risk Management

Poor risk management, and even worse, no risk management is a major reason why Forex traders lose their money quickly.

Risk management is key to survival in Forex trading including day trading. You can be a good trader and still be wiped out by poor risk management.

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