Why is it that 90% of all forex traders end up losing every day? Considering the number of newcomers into the trade, a constant 10% rate of success must also be, in actual number, leading to more people being successful in forex trade. Adversely, this also means that people who lose also increase in number – even much more than the increase being experienced by the winners. What is the deal with the increasing number of people who keep losing in forex trade, and what are they doing wrong?
Forex trade losers all tend to subject themselves to practices that are complete no-no’s in trading. However, this same group of people never seem to learn from their mistakes, and just keep on doing what they they do best: losing. It shouldn’t seem much of surprise if in the long run, everything they have invested becomes a part of some disappearing act. Following are some of the common practices of traders that lead them to lose everything they have invested in forex trading.
Not Following the Game Plan
One of the most important things to take note in forex trading is that success is more likely to happen if a sound trade plan is formulated and followed properly. Like most plans, execution ends up becoming much more difficult to do, as compared to the planning process, itself. To put it quite simply, people lose just because they fail to follow their own brilliant plans.
Nonexistent Money Management System
Money management in forex trading truly is a dull subject. It is, however, entirely necessary to follow if you have forex trading success in mind. Nonexistent money management system refers to the simple absence of money management, or the noncompliance of present money management rules: both of which ultimately lead to losses in the forex market.
It is important to follow some sort of money management system in order to be profitable despite losses. Those who fail to follow a money management system will eventually end up losing everything they have investment in the long run. Unless, of course, they are particularly lucky people.
Turn Forex into a Soap Opera
You know how soap operas tend to become too emotional most of the time? Many traders often commit the soap opera mistake by becoming too emotional with their trading choices. With a some news here and a couple of rumors there, many traders fall prey to their anxiety by pulling out of trades too soon, or getting into ones that are sure to end up in losses. Keep your emotions in check, and you’ll be surprised at just how more disposed you are to deciding wisely.
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