It is usually known that many of the Forex traders would fail. In fact, it is calculated that 96% of forex traders will lose money and eventually give up. To help you be on that hard to win a 4 per cent of the traders, here i made a short list of most familiar reasons regarding why Forex traders are making lose of money.
1. Low initial capital
Many forex traders would start seeking for a way out of the debt, or else to make easy money. And normally for the Forex market it happens to encourage you to trade in large lots, and produces a large trade with high leverages so as to produce good returns with some small start-up capital. You should have money to make money. It’s possible that they can create an excellent return on capital which is limited in the short term. However, out of a small amount of capital and risk out of range, you’ll feel every hit in the market, as well as jumping in and out, and even may face the worst possible times.
People who are just beginners in the forex trading must never trade with small amount of investment or capital. It is a difficult issue to overcome for anyone who needs to begin trading on a shoe string. $ 1,000 is a reasonable price to start with ,if you act very low or go for Microlots or even less. Otherwise you’re just making yourself up for potential damage.
2. Failure to manage the risk
The risk management is the key to survival. It can be even by being a very skilled operator and still be destroyed by poor risk management. Your job is not a number to make profit, but to make you safe of what you have. Since your capital is small, the ability to make profit may be lost.
You have to use stops, and be alert to move them if you get a reasonable profit. Also Use batch sizes that are very reasonable in relation to its capital account. Especially, if the exchange is no longer making sense, then try to get rid of it.
Some traders may feel the need for forging every last pip out of a movement. money is to to be made in forex markets each day. Try to take all the last pip before a currency pair turns and can be conditioned to lose profitable business that is granted.
It seems clear, but do not be greedy. It ‘ok to make an affordable profit, but they have a lot of points to move around. Currencies changes every day, There is no mch need to get that last pip. Next opportunity is just at the corner.
4. Indecisive trading
In times you may seek yourself suffering from remorse business. What happens when you open a business is not immediately profitable, and start saying that you have chosen incorrect direction, and then close the trade and reverse, so as to look the market back into the initial direction you choose.
Choose a single direction and stick to it. Everything round pieces only make you lose your saving sometime .
5.Try to choose tops or bottoms
several new traders may try to take turns in currency pairs. Trade will be placed in pair, and as he keeps going in wrong direction, which continue to add to your position, be sure that you are about to change around this time. If trade in this way at the end you may end up with more exposure than that is planned, and ofcourse terribly in a negative trade.
Trade according to the trend. it is ofcourse Not worth bragging rights to choose a background of ten attempts. If you believe that the trend will change and want to operate on the possible new, wait for a confirmed and good trend change.
6. Refusal to be wrong
Some business offers simply may not work out. It is human behaviour to be right, but rather sometimes we just do not. As a trader, you must sometimes be wrong and just go, instead of just to the concept of getting right and ending with an account which blown.
It’s a hard thing to work out, but you may have just need to accept that you have made a mistake. Whether you entered the business for the incorrect reasons, or did not work as expected. Anyway, better thing to work out is to admit the error, eliminate trade, and move to next opportunity.