It's quite amazing to discover that over 90% of those who begin their trading career lose their trading account within a short period of that. When I got to discover this fact, I was afraid of trading the forex market. Of course what's the use trading a market when majority of those into it are losers. I grew sceptical of what would be my fate if I eventually trade the market. But a thought flashed into my mind as I was about giving up the idea of taking forex trading as a career. The idea that flashed into my mind was, despite the fact that 90% are losing, then there must be about 10% of traders that are making all the money in the market. Also I compared that to any conventional business. In most conventional businesses, about 90% of people who begin a business lose and end up folding up the business. After my comparison, I thought to my self that it is quite possible to join the 10% of trader that are on the winning side. Through research and practice, I got to sift out the major reasons 90% of trader loss their trading account fast.
From my findings I noticed that the losing traits exist in the 90% of traders that are perpetual losers. If you can get rid of these traits, there's no reason why you can't succeed as a forex trader.
Below are some of the traits I got to discover. Take your time to study them thoroughly and I believe that together, we shall smile.
Trait Number 1: Jumping From One Strategy To Another.
Most beginner traders are in the habit of moving from one trading strategy to another. The major reason behind this attitude is because, they hardly spend time to develop their trading system. When they encounter a string of loses, they jettison their trading system and go in search for the next best forex trading system they can find. When they encounter another string of loses as a result of implement their new system, they eventually jump ship and lot for any advertised trading strategy that promises 100% profit in return. When a trader moves from one system to another, he would eventually lose focus and that alone can kill your trading account fast. In forex trading, there's no holy grail. You need to sit down and develop a strategy until you are comfortable with it. That is why it is highly advisable to demo trade first before you start trading on a live account. Another disadvantage of jumping from one trading system to another is that you eventually lose confidence in your ability to trade well.
Trait 2: Poor Money Management:
Bad money management is a disaster that many new traders experience in their journey toward become a millionaire trader in one day. Lack of proper understanding of this subject is the reason why there are more losing traders than winners. To succeed as a trader, you must know what money management is and how to adjust it into your trading plan.
Trait 3: Not Using Stop Loss
This is a common problem with many new traders. They expect to be right all the time and so they feel that it is a crime for them to lose a trade. In their pursuit to win al their trades, they don't use stop loss and so they leave their trading account exposed. The purpose of stop loss is to protect your trading account in case there is a move that goes against you while trading. What most traders think is that the market would always reverse and move in their favour so they will keep a trade open and wait. Most often than not, the never move in their direction, instead the market continues its journey against their trade. If this happens for a long period of time, it would eventually wipe out their account. There are time some traders are lucky to win trades without stop loss. But be rest assured that if that kind of system continues, their account would soon be gone forever.
Trait Number 4:Get Quick Rich Scheme: Many beginner traders think that the forex market is an avenue to make big money in a short period of time. As a result of their belief, they enter trades with big lot size and expect to make 100% profit in a day or a week. When they are disappointed as a result of what they see, they begin to complain.
