Apparently, these three things make Forex traders fail
You need to know that just like so many other businesses that promise great profit potential, forex trading also requires knowledge, time, patience and sincerity in practicing understanding and running it. This is probably why not too many beginners can really master this business on the first try.
After a dozen years of observing the forex world, it turns out there are at least three reasons why very few people are able to survive in forex trading. Well, if you are a beginner, it’s a good idea to read this article to completion so that you don’t fall into the same mistakes.
1. Underestimate risks
Apparently not many realize that forex trading – like other businesses – saves potential risks that should not be underestimated. One of the common mistakes beginners make is that they are too lazy to learn how to manage risk and avoid losses that are too large.
Beginners generally only imagine super-large profit opportunities without caring enough to learn how to deal with risk. As a result, their lack of knowledge in risk management causes the losses suffered to accumulate to be far greater than the profits they earn. In fact, many of them make transactions in too large volumes in the hope that they can get huge profits immediately, without thinking (or at least underestimating) that the market can move against their will.
It is true that if the market moves according to expectations, the profits will also double; but what happens when the market is really against their wishes? You certainly know the answer: they will lose big. This is why risk management and capital management are very important!
Actually, this is related to point one above. When beginners experience losses, most of them will be disappointed and decide to stop trading.
To be a successful trader, you must really understand that loss is an integral part of trading, as well as profits. There is no holy grail in forex trading, so you must always be faced with potential losses, even once twice experiencing losses in a certain period of time.
The problem is that not everyone is willing to take risks. Most beginners are not strong enough to admit that they have suffered losses, while others don’t even like to see any loss records in their transaction history. What they have in mind and what they want to see are profit, profit, and profit.
Even though all successful traders agree that there are times when they have to dare to get rid of transactions that do cause losses. If for example they open a “buy” transaction but the price turns down, they will not hesitate to cut loss in order to save their capital from the risk of even greater losses.
A world-class trader named Ed Seykota once said, “The elements of good trading are: 1. cutting losses, 2. cutting losses, and 3. cutting losses. If you can follow these three rules, you may have a chance. “
3. Unfulfilled expectations
For this one thing, you might be able to blame the “boaters” who managed to persuade you into the world of trading with the lure of extraordinary profits to make your saliva drip. But when the reality is not as sweet as hope, most beginners decide not to continue their trading journey.
By the way, who are the “boaters” in question?
Among them may be salespeople from certain brokers who only think about their turnover and sales targets. Quite often they sow sweet promises so that prospective customers are interested and want to open a trading account with them. At all, they did not mention risk factors.
Of course not all sinister salespeople. There are also good and right salespeople, those who honestly say that there are risks that need to be managed properly and of course that requires sufficient knowledge. Even brokers where they take shelter are specifically providing facilities and infrastructure for those of you who want to learn to trade seriously before deciding to jump into the real world of trading. Well, if you find a salesperson like this, you don’t need to hesitate to join them, because they care about the continuity of your investment.
Are there brokers who care about the survival of your trading?
There is. The characteristics are:
- they provide comprehensive learning material supported by teaching staff who are always ready to help you
- there is analytical support for customers, including consulting services where you can communicate directly with the analyst team
- there are a continuous education and analysis program
- You are helped to find a strategy that matches your character and capital strength
- You can freely ask anything about trading problems
Well, now hopefully you can already know what you have to do to become a successful trader in forex trading.