4 reasons why you are a failing forex trader
You’ve been burned, like most traders, and you’re hoping that by God’s grace, this would provide you a semblance of a solution. You’re in luck my friend because you will receive more than a semblance of a solution; your trading will change forever, and that is precisely what this will accomplish.
Most currency traders begin by seeking a way out of debt or to make quick money. It is usual for FOREX marketers to push you to trade huge lot sizes; for example, you may have seen Instagram posts you know those ones with plenty of blues and huge lot sizes with high leverage to create large profits on a small amount of beginning cash. However, with only a tiny amount of cash and outsized risk due to excessive leverage, you will become emotionally involved with each swing of the market’s ups and downs, as well as leaping in and over at the worst possible times. You may avoid this problem by never trading with insufficient funds. This constraint is a difficult obstacle to overcome for someone who wishes to start trading on the cheap. $10,000 is a reasonable starting point. Otherwise, you’re just setting yourself up for failure. You may argue that you do not have $10,000 to begin trading, in which case I would advise you to take a prop firm challenge. With as little as $100, you may get access to $10,000 in trading capital.
Inability To Manage Risk
Risk management is essential for survival as a forex trader and in life. You can be a really talented trader, but inadequate risk management can annihilate you. Your primary responsibility is to safeguard your capital and move your equity curve from bottom left to top right. I would want you to abandon the concept of flipping accounts in a short period of time; a good trading system will offer you profit month after month if followed faithfully.
Giving in to Greed
You may believe that you must extract every last pip from a market move. Every day, there is money to be earned in the currency markets. Trying to capture every last pip before a currency pair turns may drive you to hold positions for too long, causing you to lose the successful trade you are seeking. Greed manifests itself in a variety of ways, most of which we are all too acquainted with. They include taking on large position size or not taking profit when due because you may feel the need to squeeze every last pip out of a market move, but a more subtle way greed manifests itself is adding to your positions, you may say I only do it after I have confirmed a trade’s direction and all the other reasons you give yourself to justify your actions, but fundamentally it is greed, you want more. The remedy appears to be obvious: don’t be greedy LOL.
It’s good to aim for a respectable profit with one position; but, you must learn to leave money on the table. Humans are lousy traders because we try to take advantage of things and make the best of the hand we are dealt, we constantly want more, and our inherent insatiable nature makes us bad traders. These are characteristics that you will have to unlearn.
Unbalanced relationship with your fallibility
Some of your trades if not most just won’t work out. It is human nature to want to be right, yet there are instances when you simply aren’t. Instead of sticking to the concept of being correct and ending up with a zero-balance trading account, accept that you are occasionally wrong and move on. You will most likely be correct with your entries and direction fewer than half of the time. You may have entered the trade for the wrong reasons, or it just did not work out as intended. In any case, the best thing to do is to trust your trading system while still knowing that you could still be wrong. Your best bet is to trade your system, and a good system followed religiously will always have you clicking the withdrawal button on your broker.