reasons why traders lose

Here are some mistakes traders make when trading:
1. Low start up capital
Most currency traders start out looking for a way to get out of debt, or to make easy money. It is common for forex marketing to encourage you to trade large lot sizes and trade highly leveraged to generate large returns on a small amount of initial capital.
2. Failure to manage risk
Risk management is key to survival.
3. Greed
Some traders feel that they need to squeeze every last pip out of a move.
4. Indecisive Trading
Sometimes you might find yourself suffering from trading remorse.
6. Refusing to be wrong
Some trades just don't work out.
7. Lack of Experience
8. Lack of Discipline. E.t.c

Thanks for that post, and on the sixth point "refusing to be wrong" is one that applies right across the board..

Should add not trading your plan to that list.

Need to plan your trades, then stick to that plan.

lack of knowledge can be one which leads to treating the trades as a gamble which can cause most of the failures really

I'm just starting out and searching all beginner threads .. interesting how much discipline is stressed! I really think thats an area I will be fine with.. but the amount it comes up makes me think I do need to keep it in mind!

Thanks for the points.

You missed some important points like,

* No proper trading plan
* Lack of discipline & Patience
* Not stick with a one trading system

One & the only - you really don't know what moves the price.

90/90/90

To make a trade with a realy big lot that will blow up your account in one trade you need to be realy a big i**ot.I dont think that it the MM the issue but its the overtrade.Just my no experience thought .

Lack of knowledge, like myself. Trading for 2 years and everyday I learn more. When I started with this I just saw a buy and sell button. Lost a lot of money because I didn't know what I was doing.

Picked it up from other thread, should post it here

I wrote this for myself, I was annoyed with my latest trading efforts., which had been pretty good until I got cocky recently.

How complicated is trading? - (a memo and reminder to myself)
Actually, that is one easy question to answer; “it’s a piece of cake”, lets try another one!

“How complicated is a trader”, now that’s a bit more difficult…

Ask your mate who doesn’t trade the markets,
“Which way should I go, up or down”?

Last time I did this with someone they said…
“That easy, can’t you see, the trends down”.

Then said…
“That’s not difficult to do, can you show me how to set up my own trading account”.

Followed by…
“I’m sure I can do slightly better than the miserable yearly 1 -2 percent my bank pays”.

His percentage expectations, I thought where very reasonable and possibly very doable “What are my expectations when I make a trade”?

(I know… I thought to myself, I have been having delusions of grandeur lately, thought I could double my account in six months). I’m sure some people can do just that, but I’m writing this as a reality check for myself, to myself, because I can’t do it…

Fact is, my friend didn’t know what time frame it was, the currency pair, or how to even go about initiating a trade, and he wouldn’t would he.

We where looking at the daily chart, and the next day the market moved further down with the trend, as he had suggested, and down again a few days later, would had given some good profit.

My friend was right, trading must be easy, because he managed to tell me the trend was down, so trade that direction, don’t make it any harder, its not rocket science is it, and remember, he doesn’t actually know anything about trading.

So it must be the idiot person with the trading account that makes it so bloody hard - that’s me of course.

Why? Expectations...

Obviously, markets don’t always do what you expect… it was trending up so you entered, but now it’s going side ways, okay, let’s see what happens, or…now it’s moving towards the stop loss.

BUT… if the bulk of what you’re looking at on the screen is saying the trend is moving down, or up, or sideways, then don’t bloody well argue with it, It’s a bloody train you fool, you can’t stop it…

Go with the flow, learn a simple way to time an entry, with the trend, and if your timing was a little bit off, well the trend may just possibly save your sorry arse anyway.

Think about this, there’s only two times you can be wrong following a trend… at the end of an up trend… or at the end of a down trend.
Shit happens, if the current trend looks like it’s now over, incidentally it may not be…but could still hit your stop loss, you followed the established trend, you did all you could, you where just unlucky, the market does what the market does, its simple, don’t fight it, no stress, look for next trend to trade. No rush.

This is so simple; we can catch a good middle chunk of the trend, our stop loss size is reasonable, the market has room to breathe.

We can’t predict the future, but we can try to get probability on our side, ensuring the next entry is always with the current established trend.

With regards to expectations, you’re not trying to make a small account do a lot of work are you? You know, silly risk, tight stop loss, massive stress. Some can do it, I’m sure they can, but its not me, that’s for sure, hell, truth be known, I probably shouldn’t even be trading.

And those bloody emotions, well, I only seem to suffer those feelings when I’m using big risk on a small account, and we know the answer to that one don’t we…

As you spend more time studying the markets, the harder and more complicated it seems to become, occasionally now second guessing your original thoughts as the indecisive rot sets in.

Basics of trading are, experience, knowledge and method, has to be… so you can sought the chaff from the wheat, but all the information your learning can actually mess with your brain in a very negative way, well… it will if you let it, and can stop you trading profitably.

So what does all this mean…?

Well from the writings above, it’s really very simple, the markets are NOT always ready and obliging to accommodate a successful trade, so before we ever place a trade, we establish what the market is currently doing, is it trending? If it is, we trade it, but if it’s moving sideways, go and do something else for a while.

Our expectations have to be reasonable or we loose to often…… to make a decent amount of money from a single trade, we have to have a proven profitable system, obviously, and a very, very decent account size. Simple as that, and use a reasonable 1-2 percent of the account per trade, and the wins are a worth while reward for that amount of risk and our available trading time.

We rinse and repeat, we can, because we learned how to trade many years earlier in our trading career, ah yes… you mean that small account with small risk, the one you managed and worked to consistently build on and prove to yourself that you can trade.

Well you wouldn’t risk a big account until you new how to trade successfully would you…good, I’m glad you understand that.
Until all that’s available to you, all you can do is learn to trade and manage a small account in a consistent and profitably way, ready for the big one.
Now please don’t ask me where the big account is coming from, all I know is...

The brokers like people with small accounts as well… I wonder why?

No plan ,strategy,money management and risk management is the main cause of loosing money Forex. Greed is also harm our trade and we can loose our money so we should always control our greed during our trade.

Revenge trading has to be up there with the other reasons.

For example if a trader took a slightly larger than normal position for example risking 5% and was stopped out he/she is the driven by the desire to make up there losses. Unfortunately instead of taking a step back and waiting for the next good trade within a minute they are back in the market with an even larger position so they can make up there losses and return to profit.

What you see is martingale strategy that is been adopted due to the trader not accepting the initial loss. One or two more trades where they increase the lot size will result in total blowout.

I see you join in the year 2007 now it's 2014, that's about 6 year of experience for you.

By now you SHOULD be able to see the market like it's 2nd nature, you are suppose to know all there is to know about the market at this point...
"sinceyou said: had been pretty good"

However, your greed get in the way again, which trigger your fear...



How about I give a simple solution that will solve your "losing problem".
#1 You need to have a job (to relieve the stress of needing to make money forex, AND a job can deposit big money into balance)

#2 You need to play with an account that is higher than $9,000$ to handle your greedy self..

#3 If you think you can win forex from a small balance like 500$ to even...4000$... think again..

#4 If you dont' have 9,000$ off the bat , it's ok.. start A GOAL of depositing 500$ PER MONTH with your job money....

Eventually you will get to 9,000$...

I am serious all those 4 points... At this stage you are ready to "beat the market" not playing around with mini balance and overleverage...

You can play medium risk with a big balance and have a much easier future...a head of you.

1) Incorrect, low capital is the way how new traders should start, but at the same time scale your position accordingly to your balance
2) Agree
3) Not properly defined, as greed is also a good motivation tool, so i dont think greed itself is bad, but greed caused indiscipline, that is bad, so wrong there too pal
4) Definitely Agree
-you missed number 5
6) Agree
7) Agree
8) Agree
9) You missed the most important one which is: LACK OF KNOWLEDGE OF THE MARKETS!!
Without lack of knowledge how the markets work, why price moves, etc, one is not a trader but a gambler, knowledge separates a professional FX trader from a wannabe FX gambler

The reason why everybody loses is they put themselves in situations that are under different circumstances every time they trade them, leading them to being inconsistent in their trading decisions and therefore their returns. Put simply, the #1 reason people lose is they are not consistent.

traders loose coz of poor money management,system hoping and trading low time frames

Very good point, I think.
But, it seems to me that nobody (including myself) knows even basics about what is Forex.

I.e. Forex is obviously not about currencies only, but also about stocks and metals, but almost nobody takes it into account when defining Forex.
Could you please help me to understand this situation? As it seems to me, digging here may help to understand Forex better.

I have found only one site about the matter, but it is unclear for me.

http://www.liteforex.com/tutorial/margin-trading/
"...Financial markets are an economic system where its participants trade in specific goods - financial instruments...
In the most general sense, financial instruments are certain obligations (contracts)...

common (usual) goods and raw materials are also sold at the financial markets.
On the basis of it the financial markets may be divided into foreign exchange markets, stock markets and raw materials markets..."


So Forex is only one part of 'an economic system' and one of 'financial markets'? This is why one can see shares and metals there, right? So definition of Forex in Wiki must be changed?

Luckily i had basic economic knowledge about the markets, and now on my own i`ve reached a medium knowledge level about them.

And i tell you the market is a very complex mechanism, involving many economic and financial concepts and its driven by many factors.Well ultimately its driven by traders, but the traders themselves trade because various reasons.

It is not that easy and definitely not that simple as it is marketed by the brokers, past pit traders usually had a learning curve of 5-10 years and they had to learn many many concepts before they got profitable.

Also trading as a profession is probably the oldest profession that every existed, even the caveman traded with his fellow caveman, so it has a very old culture and tricks behind it.

No the Wikipedia definition is correct, forex is only a currency market, nothing else.However the currencies themselves are tied in with many many markets, currencies are affected by many things, including stocks ,bond etc.In large perspective with the entire economy, but the market itself is only about currencies.