Sunday, December 3, 2017

Why Do Forex Traders Lose Money and How to Stop Losing Yourself?

Estimates place the ratio of Forex winners to losers at 1:19, meaning that 95% of traders lose money while only 5% end up with consistent profits. Why is that? Why do so many people end up losing money?

Some people say it's all a matter of luck, that the Forex market is so volatile it can't be predicted anyway and so it's just a matter of dumb luck who ends up a winner and who a loser.

I don't believe this is the case. If all there was to this was luck then there wouldn't be consistently profitable traders and there are. This means there is some objective reason why some traders make money and others lose it.

Another possible reason is Forex education or lack thereof. Some traders don't invest in learning how the market works, why it behaves in certain ways, how to place high probability trades, and so on. These are really gamblers, not traders, and so they really depend on luck. Sooner or later, this luck runs out, leaving them with big holes in their account balances.

Without getting a proper education, your chances of making it on Forex are pretty limited. I'd say they're close to zero. So, get a few solid courses and trading systems and really master them. If you're not ready to learn you will never succeed.

Even if you have taken courses in the past, realize that learning how to trade is an ongoing process. You need to continue investing in your trading capabilities. It never stops.

You should make sure that your education is diverse, involving different methods, styles, and approaches. A well rounded education should help you to make more money on Forex.

One of the things which most traders ignore and which may lead to tremendous losses is the psychology of trading. The truth is that there is a lot of anxiety involved in trading because you're risking your hard earned money and you can never be fully sure of where the market is going and how each trade is going to turn out.

The problem is that this anxiety and pressure can lead to emotional mistakes which can prove very costly. I believe that it is these emotional mistakes that lead a large part of the 95% of losing traders to fail in Forex. If you don't learn to control these emotions and be able to trade according to your brain and not your gut, you will not succeed.

This is why so many traders lose money on Forex.

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