Why 95% Of All Traders Fail

i m fully agree of ur dicussion many trader dont follow these steps and get loss and wash their account

The most important factor is the use of leverage, professional traders dont use more than10-15x...I believe this is the reason most rookies hit MC

I suggest a book called Naked Forex to help you out. It was the first piece of literature I read on trading & over a year later I find myself reverting back to the original teachings I learned in that book. Buy it on Amazon for pretty cheap or find the PDF online for free, I believe Forex Factory has a link to it even. I've incorporated things from this book with things I've learned from Steve Mauro and my view of the markets is totally different, in a good way of course.

Traders fail because they "fail" to realize that "Results will vary in forex". Many people see some sort of movement or have some sort of "hunch" and that allows Bias to set in and from there we are on an emotional roller coaster.

You can relate the losing trader to those who go into any business and fail at that as well, The failure rate of new business start ups is 50% in the first year and within five years time 90% have failed.

I would say your point is "valid" but on the other hand, isn't the "root" of the issue. If professional trades use 20:1 or 50:1 it makes no difference, as "professionals" lose also and margin call. Soros lost a lot of money on the Brexit move. If a person has only 100 usd to wager, they won't be able to trade with 15:1 leverage. The trade plan and money management is the key in forex. If one looks at my own trades, you would see how well I was doing, only to give back almost 100% of my profit to the market in one sitting! The issue wasn't the leverage but my money management.

"under-capitalized" I don't agree with because of the exponential growth potential of compounding account percentage

...and that's why I like forex so much, we are able to have very small, real money accounts with leverage and use on-chart trading with bracketing entered along with the trade entry, it's the best way to learn out of any other trading, no minimums, no fees for data, or platform, or broker, or taking time off, or adding funds, seriously great.

Market is unpredictable. You can read a lot of forex books, enter many cources, learn all strategies of trading. And even after all analysis you make the price can go the "wrong" trend. It seems like somebody controlls all this

95 % of traders fail because they want to make millions in the first week they start trading. Until they realize that this is one of the toughest games played by the biggest fishes out there and they all want your money. Once the trader realizes that he has lost a few bucks already and have to become consistent and accept that making 2% a month is what professional traders do and consider good profit. Even for these 2 % you have to learn hard and study those charts which is not as easy as it looked at first place. That is why most traders fail.

Traders need to study the chart history and come up with a good winning rate from their system. If not, its just gamble.

Traders generally do not spent much time on developing their system.

Its like a scientist developing a vaccine to cure a virus... it will take years of trial and error... endless repeating until a consistent result is shown.

This is it! ,some traders undermine the power of a trade plan and money management especially ,you could have the best system at your disposal and still fail terribly if you fail to plan your trades before you execute them .

everyone fails at everything when they are novices, the problem is that a novice isn't typically given the access to what the pros have, the big account, but newbs don't know they are newbs and that there is a learning curve just like everything else, so then they start to trade with the same risk as the expert, but they just aren't yet an expert, so they mess it up because anyone in any field would do exactly the same thing. Co-pilot before pilot, assistant to the expert for years before given the responsibility of the expert, assistant surgeon before surgeon, trainee before trader/manager/network manager/doctor/teacher/agent/driver/cop/everything including the guy who makes all the trading decisions, but we have no system for that because experts like to have a little more liquidity provided by newbs who add it for the experts to enter and exit easier, we need your money.

I think a lot of it also relates to people not realizing/knowing anything about the leverage they are using. This is what I think is important and not emphasized by many. SOMEONE PLEASE CORRECT ME IF I AM WRONG WITH ANYTHING BELOW - If I am incorrect here, then I would like to be sure I realize.

If I have an account with a US broker that allows 50:1 leverage:
*if 0% free margin left available, then it means that I am using 50:1.
*If 50% free margin left available, then it means that I am using 25:1.
*If 80% free margin then I am at 10:1 (50*20% margin committed = 10).

At these different levels, BOLDED is the "wipeout INSOLVENCY amount":
50:1 (-2% move against renders insolvent)
25:1 (-4%)
10:1 (-10%)

I think people do not pay enough respect to the leverage involved - and the disciplined management of it and realization of what it means/how to deal with it is important. Just my thoughts though. I try to stick to 10:1 MAX as a matter of principle which even still might be too high... and I then usually still keep a 3-5 times (300-500%) coverage ratio of the amount I am leveraging in a side account as well.

u got the point there

Traders lose money because they (1) Don't have a system (2) and if they do its not consistently profitable.There are no other possible reasons. Trying to develop a profitable system using standard indicators ,as mentioned above, is impossible.( Given the number of traders,both past and present, the number of indicators commonly used, every combination and permutation of those indicators have been tried by any number of traders to no successful avail that we know about.If there was one it would have been discovered by multiple traders and be common knowledge by this time nullifying the entire market concept.) That legion of expert advisers and assorted guru's hawking their proprietary tip sheets know little more than their customers because if they actually did they would be trading rather than talking about it. We are therefore left with the dilemma of developing our own system. My approach, controversial as it may be, is to create a price action bar to bar analysis based solely on closing price ,range,velocity of price change, employing standard metrics of EMA, SMA, and BBands.(Crosses, in of themselves are meaningless)It matters little whether the bars are 5 min or 4 hr. , 1 wk or 1 mon. the results are the same. I do not try to identify trends, determine support or resistance,find breakouts or consolidations but simply limit my analysis to the direction of the next bar (not candle) Modest as this may be it works for me and perhaps be a starting point for some of you

Traders lose because the price will always move in the direction that causes the greatest financial damage to the largest number of accounts.

Namaste! Yes for the above reasons most of the so called traders do fail but.... THE MAIN REASON is the lack of propper trading education, Second in my view is the lack of IRON DISCIPLINE. Discipline is very important in trading. The lack of a trading plan comes from the lack of a propper trading education. Another big reason is the will to get rich quick. There is not such thing as get rich quick but this scheme is promoted not only by most brokers but also by the most trading educators, analysts and many members of many forms that promote the holly grail style trading systems. Most of the so called traders does not even know how a tred works, what is a breakout, a retracement, a price consolidation and also most of them does not know that all technical indicators are derivations of price and that no indicator can tell you where the price will go next.

Regards!

Maybe it's time to really cut to the chase. Here's one for traders starting out.

As traders we aim to make money. This is the sole purpose of trading.

Traders fail because they 'lose their money' and give up. (read on before you 'palm to the face' and 'duhhhh')

Losses are not something we are comfortable with in this society where everyone wants to be a WINNER ! We all want that big win, however focusing on the big win in the trading arena will ensure that you always end up in that unhappy 95% of losing traders.

Almost all of the successful traders have one thing in common. They instead focus on their losses. Every trade is entered with a clearly defined level of risk. This money risked is carefully managed so that no single losing trade, or succession of losing trades can do significant damage. It really hits your confidence and ability to 'pulll the trigger' if this is more money than you are comfortable with losing.

Don't under estimate the importance of money management and specifically the management of losses. How much are you comfortable with losing on each trade? maybe 2% of trading capital? so that's how much money.

Enter into a trade and know clearly at what level your reasons for taking the trade prove to be wrong. Workout your stoploss level. Adjust your position size so that the capital risked on the trade is within this maximum allowable money risked per trade. Set a stoploss. If it hits that level then GET OUT fast. Don't widen your stop and don't lose more than you have to.

Cut your losses quickly. Don't lose money! Focus on your losses. Some seasoned traders even say love your losses. Look at a swiftly cut losing trade with a small loss as a job well done and then look for the next valid trade entry.

No one knows with any kind of certainty where the market is heading next. It goes, we try to follow. As a trader we will always have losing trades. Everybody does. Make sure that they are small. Don't focus on how much your gonna make on this trade of the century. If you want to focus on the big win, just take a sidestep and instead head to the nearest casino and join all the "I'm gonna be a winner"s there! It may even be cheaper in the long run and at least you won't be fooling yourself.

Even with a 50% win rate and strict attention to cutting your losses while letting the market give you what it will, you'll be one step nearer to profitability.

I first started trading stocks in the mid 90's, but it's this single piece of advice put into practice that had the largest positive impact on my trading account. I'm not saying anything new here, but it's more than worth a mention in this thread.