TOP 5 REASONS TO LOSE MONEY IN FOREX TRADING
Lack of Experience
Forex trading has a learning curve. To make success in forex trading there is no shortcut way exclusive of learning. The much more you gather experience, the more possibility you make success in forex trading. Many online forex brokers offer a practice version of trading platform that offers very similar experience as a live trading board. Typically, you create a practice version account and deal trade, observe how market reacts to economic forces including news event. If you expect to learn from experience, you must treat forex demo account seriously.
Lack of Rational Expectations
‘Get rich fast’ is a vague term. There is no shortcut way to become rich. To become rich, you must have passion, devotion, hard working & experience. Do not stop learning. Forex trading is an excellent option to make money fast but it does not happen overnight. It might take several years to gain the experience and get massive return. Some people want to get rich selling house. Their all assets invest in forex market & pray for good luck. Forex market is not the place of gambler. So do not quit your job just yet.
Lack of Sound Trading Plan
Success of any platform depends on how perfectly plan is formularized. The common mistake of new traders is lack of sound trading plan. They do not calculate risk associated with the return, amount of time required to be successful. You must set your objective, the amount of advantage you will use, the amount of time you plan to give to your forex trading. In your objective formulation, you must have exit strategy plan, in each trade; you must identify the upper and lower boundaries of trading.
Lack of Discipline
A good plan only works if you follow discipline. Your patience is required to get success. Continuously change the plan or always follow similar plan do not give you good feedback. You have to regular observe the market trend, re-examined your plan. Sometimes you find that market can be so volatile that no plan is working. In this case, the best option be not to trade until you can get a better handle your account.
Lack of Confidence
Yes, confidence is must to be success. In forex trading, you have to frequently change your plan, regularly learn from forex trading. A common trend of new traders is that they always try to follow big traders. Big traders have several prevention tools. After a certain time, they can recover loss and gain big cash. Big traders strategy and new traders tragedy are never be same. When you go to forex trading, you have your own strategy. You are well known about your strength and limitation. To set a good strategy, you consider yourself; do not be foolish blindly following big fish.