What are the main reasons why Forex traders Fails?
Although traders can earn good amount of money from foreign exchange market but most of the traders lose their money. It is not difficult to know why most of the traders lose their money in this market. The reason behind their failure is that they only believe the benefits of Forex trading but ignore the pitfalls. The main causes of failure in Forex trading are:
- Treat it as business, come out of job mentality: Most of the traders think that it is very easy to make money in currency market and they can succeed without making much effort. The reality is that the currency exchange market is the place where most of the people lose their hard earned money. The reason of their failure is that they do not treat it as a business and do not want to learn and improve their trading skills.
- Myth about Get Rich Scheme:
Most of the people think that they can become rich in no time by investing only few dollars in their trading account. Do not treat Forex as a quick scheme of getting rich. The high leverage offered by the Forex brokers is a very big disadvantage for the careless traders who have limited capital and ignore the importance of money management. Unlike big traders with good funding, a small investor cannot afford to ride the high volatility of the currency market.
- Don’t Get Trapped by Selling Speech: Do not expect to earn a lot of money in a short duration of time. Do not think that more you trade, the more you earn. Most of the traders think that Forex trading is commission free but they do not understand the expenses charged by the brokers in the form of spreads. If you have suffered a loss by few pips then you need to win constantly to cover your transaction costs to become profitable in currency trading.
- Selecting a Platform: Selecting a broker in haste is one of the causes of failure. Never open your trading account with the first broker until and unless you have done enough research about him/her. There are many unregulated Forex brokers with large spreads and bad executions. Trading with such brokers is worse than gambling in a casino. Casino has a mathematical benefit against the gamblers but traders can see the cards of such brokers when they will lose their entire hard earned money.
If you want to earn money from currency trading seriously then hire only a reputed and reliable Forex trading broker. Spend enough time in researching the market as well and then see what it will offer you.
You can be on your way to profitable trading if you can avoid the causes of failure. Successful traders are not born with trading skills but they develop these skills with practice and proper risk management. Online trading ideas can be programmed by you to do all the hard work for you. The easiest way to avoid these causes of failure is to develop relationship with other successful Forex traders and learn risk and money management rules from them.
- All those who have decided OR Want to change their living, Want to be financially free using Currency/Forex Trading Concept.
- This is the best place in the world to start making Money.
- Your own choice of Yes and No will make your Destiny!! Take time and understand What you really want from the life? And what all you are missing from your life.