Suggestion Why do most forex traders lose money in the industry

[PIPS OF NIGER]

The reason many forex traders fail is that they are undercapitalized in relation to the size of the trades they make. It is either greed or the prospect of controlling vast amounts of money with only a small amount of capital that coerces forex traders to take on such huge and fragile financial risk.

 

[Kate112]

Yes money management and lack of discipline. If you have a trading strategy you have to stick to the rules 100%. I think our emotions get in the way especially after making a few losses.

 

[mr_camera_man]

That's part of what's caused me some problems in options trading. And that's why forex is interesting, because it's easier with a small account to enter smaller positions and take more appropriate risk. Tough to do with options when a single contract on a major index can be over $500.

 

[oakum]

See, there a lot of reasons behind why you might lose money, but most of them stem from poor money management, and unnecessary risk taking, it’s okay to lose money, but there is a problem with your strategy if you keep losing it

 

[Bumbledom]

See, there a lot of reasons behind why you might lose money, but most of them stem from poor money management, and unnecessary risk taking, it’s okay to lose money, but there is a problem with your strategy if you keep losing it

There are many traders who are aware of the unnecessary risk they are taking but under the influence of greed they are unable to use a strong risk management strategy and hypothetically assume that they are making a large amount of money.

 

[Pontoon]

Most traders lose money due to lack of effort and patience. They neglect the most important aspects like technical and fundamental analysis, risk management and money management and often trade with eagerness instead of taking decisions with patience.

 

[franzschubert]

This question can be answered as follows: If all traders were equally well capitalized, exactly 50% of them would win the money of the other 50%. So winners and losers would be equally represented. However, since there are now large differences in the capital brought to the market by each market participant, one must formulate it more generally: 50% of the money wins the other 50% of the money. Due to the concentration of money in the hands of a few market participants, there are few traders who win (a lot of) money and many traders who lose money.

 

[franzschubert]

The question that arises from the post above is this: Why do the few market participants with the big capital win the money of the many traders with the (individually seen) little capital? Why does the money flow from "poor to rich" and not from "rich to poor"? Because the few have the power to move the market in their favor, to steer it repeatedly into their profit zones and then turn it around to start the next move. The herd of the many can only follow and is always one step behind...

 

[BareNakedPriceAction]

The question that arises from the post above is this: Why do the few market participants with the big capital win the money of the many traders with the (individually seen) little capital? Why does the money flow from "poor to rich" and not from "rich to poor"? Because the few have the power to move the market in their favor, to steer it repeatedly into their profit zones and then turn it around to start the next move. The herd of the many can only follow and is always one step behind...

Then wouldn't the answer be to trade against the herd? It blows my mind how many people are following a lot of the same signals but then can't for the life of them figure out why the market went against them and took them out at their stop losses. I think the answer is mainly poor risk management mixed with lack of understanding how the market works. The algo that runs the market seems to have one purpose. the market makes and the market takes liquidity correct? So instead of joining the masses and becoming the liquidity wouldn't one would be smart to instead wait for the liquidity sweep and then trade with the trend of the market? It just seems logical when you see 92% of traders losing while trading, why would it ever seem like a good idea to do what majority of traders are doing?

 

[Fin_Trader]

Traders lose money because they don’t want to learn, but they want to earn a lot and quickly. There is no discipline, no endurance, there is greed and passion.