Why Most Forex Traders Fail?

[Ruben JR]

Forex trading is not something to take lightly. If you truly want to be successful at forex trading, you must be prepared to invest the time and hard work to acquire the three factors for success – knowledge, experience, and emotional control.

Some of the crucial psychology reason are as follows -

Fear

Fear is very important factor in trading physiology

Several types of fear arise often in the course of trading whether consciously or unconsciously, these emotional responses include:

• The fear of failure
  
  
• The fear of missing out on potential profits
  
  
• The fear of losing everything.

Fear will often save you if you act quickly when you see that you are wrong.

Having a great trading system and all of the technical and analytical tools for success in trading is not enough to be successful. a trader has to have the right mindset. This can only be accomplished by learning to control emotional responses when trading and in all trading situations.
Hope
Hope can be one of the most damaging market emotions to a forex trader’s success because hope can keep a forex trader into holding onto a losing position in the hopes that the market will come back.

The market has already proven the trader wrong, but hope makes them stick with the losing trade, often leading to damaging results for their trading portfolio.
Greed

Like fear and hope, the emotion of greed is common throughout the forex market, and it basically is the excessive desire for more than you need.

Greed prompts you to act irrationally. For traders, this usually comes in the form of overleveraging, overtrading, chasing the markets, or holding on to forex trades you know you should’ve exited long ago.In many cases, greed can manifest in the common trading errors of overtrading and running winning trades into losers. When you think about it, greed is not that different from alcohol; it can make you act foolishly when you have too much in your system.
Overconfident /Excitement

The emotion of excitement can often arise after a trader has made a winning trade.

At this point, the trader needs to remember in the heat of that excited moment, that their success in trading over the long run will be determined by how disciplined they are in following their trading plan. The boost to their confidence may lead them to think they can do no wrong, and that can be when the problems start.
Lack of Discipline

Lack of discipline leads to emotional trading and is another of the major reasons why most forex traders fail. Unfortunately, more often than not, a trader that loses discipline will eventually lose money as well.

Trading without discipline is like gambling. Such a gambler might get favoured with a long string of winners, only to gamble away all of their winnings and more before leaving the table.
Unrealistic Targets and Goals

Another reason why most forex traders fail is because they have established unrealistic targets and goals. Always remember that the trading goals and target should be realistic as per your trading plan and investments.
Lack of Knowledge

Last not least the other factor for losing money in forex business is lack of knowledge Just as it is with any business, whether you are selling products or services, trading futures, or trading in the forex market, you need to know the business in order to be profitable. Never stop learning in this business.

The emotions of greed, fear, overconfidence and hope are some of the major reasons why most forex traders fail, with practise of discipline and dedication one can ache huge success in trading. Wish you all a very good future in trading and investing !

 

[selva]

take risk greed is good greed is work

 

[edyy]

mostly is greed. and cant wait

 

[vindiou]

Lack of discipline because of emotions

 

[Kadija]

cos most of them no use Mange account < ti win you have to mange your loses and give yourself chance to win

 

[monfleri]

Thanks, excellent contribution. I repeat, that since I came to this forum, your topics and help have helped me more, it will become one of my favorite forums. Thank you for helping my process to be a better trader.

 

[Haniza]

I dont know when to entry and exit properly to maximize TP and minimize SL.

 

[Edward Peterson]

Most traders wind up failing in light of the fact that they don't have any discipline. Furthermore, Since they don't go for broke administration rules. Trading 1% from incentive with settled stop misfortune and take advantage will save you from many botherings. This straightforward framework I associated with have an edge and dependably win trading currency CFDs. Another critical thing is they don't have any control over their feelings while taking. They deliver passionate choice like revenge trading.

 

[ricardo.laxus]

I think that most of new traders end up failing because they get disapointed of not making money right away, they have to uderstand that this is not something you mater in one night or one week, it takes a lot of time and discipline for it to work.

 

[alhwity]

good greed is work

 

[murali]

Trading is just like any professional career as an engineer, doctor or lawyer. It takes years of commitment and effort to get good at it, and you must be willing to learn from your mistakes.
The beautiful thing about learning is that you can profit from the experience of others, to reduce your learning curve.

 

[Dxy25]

Thank You ........
it's really help me .... for my trading.

 

[Baazex]

Forex Trading is a kind of business where learning and experience plays vital role most of the newbies failed for being impatient and neglect the learning part they jump into direct trading even they have no demo account trading experience nor enough capital.

 

[KAYGEE]

• The fear of failure....................................

 

[KAYGEE]

• The fear of missing out on potential profits............................

 

[loka heng]

Trader always fear of losing money but it lead them to lose money for sure

 

[Nathanfc]

I dont know when to entry and exit properly to maximize TP and minimize SL.

Hello Haniza, you are not alone in this dilemma, actually, most novice traders and some experienced traders even go through this issue. You can overcome this by;

Analyzing the market and identifying a trend: Research, learn and understand what are the relevant correlations and factors that are affecting the market. When trading forex pairs, the first step is to understand what moves the various currencies. After learning about the forces pressuring a forex pair, you will know what to do with a specific asset.
Forces include interest rate changes that can push a currency price up or down, geopolitical factors like war, political unease or oversupply/undersupply of a commodity like oil. Too much inventory also decreases prices, as well as natural disasters and natural supply and demand.

2: Pick your position: After analyzing the market and perhaps focusing solely on understanding just one asset, you should then decide whether to buy or sell the pair. In other words, you will go long if you buy the unit, or you will go short if you choose to sell the asset.
In Forex, you will obtain profits by the difference between the entry and exit prices; that’s why picking the right entry point is vital for your position. The key point in this step is to BUY LOW, SELL HIGH and vice versa. For instance, if you think the price of the EUR/USD is low, buy it and then sell it later for a profit. Or the reverse is true if you think the price is high, sell it and then buy it back for a lower price.

3. Use proper position sizes, Use limit orders, Use indicators and Monitor your trade.
4. Exit your trade via take-profit orders or via stop-loss orders.
Please practice entering and exiting your trades through demo accounts, most forex brokers like my broker Profiforex offer good non-expiring accounts demo accounts with the same conditions to their real accounts. Practice, practice, and practice, this way, you’ll develop and refine a trading strategy that will help you establish long-term success in your forex career. Good luck and all the best to you!

 

[Real_Freedom]

Trading gets the worst of you at the time of trading, so if you do not have enough control, but do not want to get away from this market, I recommend forex robots.

 

[lev_lake]

What is the best Forex Trading Systems? Scalping vs

 

[tenungskrin]

thank you for the usefull information.... i'm still more to learn.. thank you again..