The market of Forex is very large. Many traders are coming and going in this market every day. Though not all traders are successful in this volatile market, traders who have got the Forex trading knowledge are making thousands of dollars every month. Trading in Forex is very hard and although most traders fail, it is because of their own faults. In this article, we are going to discuss some common reasons traders fail at this market.
Fear: Fear is the first reason traders fail. They have heard that if they lose any trades, it is very hard to get their money. Many traders fear the market and do not place trades. If you are not placing trades in the market, you cannot win trades. If you lose some, try to learn from your lost trades. Do not stop trading because you fear the market will take your money. The professional Swiss traders always consider their losing trades as part of their trading career. They know very well that losing and winning are all the random outcome of the market. For this reason, they always trade the high-risk reward ratio trades so that even after losing more trades they can still remain profitable overall.
Over expectation: Do not expect too much from the market. Work your strategy and make your profit. Always focus on quality trade execution and try to earn a reasonable amount of money according to your deposit. Never let your greed take control of your trading.
Greed: Greed is another reason traders fail on this market. The market is very large but it does not follow that any trader can become rich in this market. It will take time before traders can master when the market will move, and how the price level will change. If you become greedy and try to make a fortune in one trade, it is very likely you will lose your money. Trade the market like a marathon runner. If you can trade the market daily, there is no need to making your profit in a short time. Most of the new retail traders consider the CFD market as a money making the machine. They simply execute high lot size trade and try to get rich overnight. But things are not simple in real life trading. The market will wipe out the entire trading account of greedy traders. So make sure that you have complete control over your greed if you truly want to succeed in this industry.
Trading with gut feeling: Many traders think they have been guided by their sixth sense in the market. They do not need to analyze the market trend and start trading the market with their gut feeling. The market does not move out of its pattern and only a market analysis can say where the price level will be. The professional Swiss traders always trade their trading plan. They chose professional brokers as their primary brokers so that they can have the best trading environment. They know that they need to trade what they see and not what they believe. However, sometimes you will have to give priority to your belief, and it is known as sentiment analysis. This is something that you will learn with many years of trading experience.
Using leverage: Try not to use leverage in the market. Using leverage in the market will only make your profit short. You may make a good profit sometimes, but when you lose your trade, you will lose all of your money. If you know the perfect way to use a high leverage trading account then you can make some serious money in this industry.