Why 95% of Forex traders lose in Forex?

To understand this truth, we need to study human weaknesses very good when it's related to the world of investment, because behind everything in life "banks, companies, countries, ..." there's human and behind Forex charts moves there's human ... speculations and decisions from human make the market move ... market moves is translated as charts crazy moves.



Fx charts moves prove clearly human weaknesses in taking a united decision as it move in full chaos each single minute during trading time "watch 1 minute chart"... if we want to make a list of human weaknesses concentrating on traders weaknesses according to my 5 years of experience in Forex ... the list of human weaknesses is based on my observations for more then 1000 traders trader i meet during the past years also based on my personal weaknesses as a human :



1- Human Greed, is the main cause behind why 95% of traders lose in Forex ... and that greed expand to casinos, poker and all the aggressive games human play or have access to them ... when a human bet on all his fortune to double or triple it's money in a short time its the greed human weakness controlling his actions ... human greed is attached strongly to the nature of a human because the life of a human is short ... 50 or 60 years if someone is extremely lucky will see 80 or 90 with a good brain... and because of this speedy life where a year pass in a blink of an eye ... the greed of human lead them to greedy aggressive investments to gain money in a fast way ... and bank know this fact so good ... what big Forex players do, they hunt greedy traders who expose there money by going against the mass or against the trend ... in the trading world we call it correction or market changing direction ... Greed will always make you lose cos the market is full of surprises ... this is why a trader need to have a pure view about the risk involved in Forex and calculate his affordable loses before he calculate his winnings ... and if you can afford losing stop lose in a trader then you can open this trade, ... wisdom in trading is to control your greed or eliminate your greed one time and for all ... cos always you will lose or you might win in Forex cos nothing is 100% in Forex and wisdom is to lose small when the market go against you "cut lose small & let profit grow"



2- Human fear, let's be realistic all human have fears as i m a human i have my fears ... and my biggest fear in life is to end up someday not fearing anything as it will not be braveness at all but full stupidity ... and this fear level vary from a human to another, only a fool don't fear nothing ... and if we allow fear to control us in Forex we will end up watching the market action and never to be part of it by opening a trade ... always i divide fear to 2 categories, Good fear: where a trader is always training his skills to become better and he fear to lose big in the market which might be translated as bad performances which mean he is not discipline or wise and just one of these 95% who always lose ... this fear will help a trader to always push his limits to become better, train better, be more serious in the market and this is why i see it a good fear cos the trader will be always pushing the limits to analyze the market better and be aware of all the tricks which might happen in the market, just to be alert and ready as a true hunter ... on the other hand ... the Bad fear: is when a trader enter big size greed greed greed, and his heart start to pump fast when the market move against him or will be worried not knowing when to close fast with profits as a scared rabbit when the market give him some pips "they call them selves scalpers and they do the biggest mistake of all cos they cut profit small and let lose grow hahaha" when you hear a trader saying he is a scalper = he is terrified when he trade and it's a bad fear cos he stress too much next to charts cos of fear ... and this fear will be translated as bad performances ... "trading is about performance, control your fears by doing good calculating for the worst case scenario and be ready for it before you calculate your potential profits"



3- Human ego, pure weakness in a human and when you hear a human in life saying he know everything meaning he know nothing, cos life is an open test and we all keep on learning new things till the last day of our lives ... and day life give us tests which prove to us that we still need to learn lot lot of things ... many traders i met they have 10 years of experience or 30 or 40 years of exp "in most cases 10 years of experience losing accounts" they end up full of ego writing books, teaching new traders, forecasting on Tv's, simply to hide this big fail ... think about it for a second ... why a professional trader need to sell books for few dollars where he can make sooo much in one trade ... it's where the trader become weak drowning under his own ego ... thinking he know too much, where in reality he still small facing the market ... and need to change all his foundations as a human first then as a trader to become better ... learning new things each day each hour to survive when tests happen ... and each trade put all your Forex knowledge under a direct test in the market ... how you manage your trade in a brave and humble way, is what make you a true brave wise trader ... to perform better and make steady profits ... always when you stand next to the beach feel small watching the greatness of our creator ... always when you trade respect these 7 billions human living on earth in the same time you are living doing all this action of supply and demand - big mass economy reflected on your small chart of 3 trillions daily market turn over ... always say to your self it's a new day, new trade to learn something new, no matter what the result will be hitting my stop lose or my take profits ... i will manage my trade in a professional way never let the market go under my skin and make me angry and start trading with supper greed ...patience, prudence, to control greed, to control fear in a perfect way ... is the only way to become a good daily trader and to manage trades with braveness ... at first it look hard ... but with good training even the hardest things in life as trading will become so simple and easy to do each day



4- Human addiction ... when you will know you are a tradoholic or trader addicted ... here's a simple test for you to know that, just ask your self these questions:

- do you open trades as you buy vegetables?

- do you watch charts for 6 consecutive hours and you don't feel board?

- do you trade with vengeance and an extreme aggressive way when you lose?

- do you try to go against the trend in the extreme rush market hours? challenging the market?

- do you always end up increasing your stop lose where you will end up with - 300 or -400 pips, never willing to accept you was wrong in your trade?

- do you keep losing trades open for days, weeks, months even you add more money to your account to lose more on the hope the market switch direction and go your way? never accepting you was wrong in your trade?

- do you keep on trading in a bad day even if you last 2 or 3 trades consecutively in one market season?

If your answers are yes for the questions above, yes you are another tradoholic ... and you start accepting the fact of losing in a easy way "becoming one of those 95% losers" you will be making your first step to become a forex addictive or forexoholic, and you must solve your addiction immediately before you lose all your money ... trading is a business to make money slowly, it's not a hobby of betting ... in life in everything "easy come easy go" and nothing will come in a easy way even in Forex ... if you don't respect the Fx chart Forex will burn you over and over again ... no one is bigger then the Fx market in fortune ... even billionaires might bankrupt trading Forex in a bad way without working first on eliminating there human weaknesses ... this is why train your self good to become a good trader and always do your best to avoid becoming another tradoholic or Fxoholic



5- Human laziness, yes the majority of human don't like to use this wonderful machine we all have "the brain" even if the brain is an amazing tool "the best gift from our creator to us" and when you know how to use it, and allow your brain storm to rage all the time questioning everything is where you will start to really feel alive in life and aware what is going on in the present ... usually lazy people live in the future or in the past in a illusion ... running away from the present ... and in Forex lazy traders enter long term trades only God know based on what they do enter "just based on 100% of luck" and lazy trader never do there homework good before trading, and the best lazy traders i like are the ones who are fan for robots hahaha ... someone must tell them the truth and in a tricky market like Forex ... the easiest tricks big players do is to trick your robots ... to know if you are a lazy trader or not just ask your self these questions:

- do you read important news each day before you enter the market?

- do you keep wake-up at night to trade till the morning? yes those who can't sleep they are lazy cos they can't relax and control there Forex passion to go and let there brains get the normal daily rest it need.

- do you keep you enter trades based on your personal feelings without any system at all or any important news which back up your trades?

- do you trade without clear stop levels as an exit point or take profit level?



Then you are another daily lazy trader, most lazy traders trade long term trades as i told before ... and lazy coward traders trade scalping style ... and brave ones stand in between ... its what i call it human equilibrium and i can write 100000 pages about this subject, yet i m doing my best to keep these articles simple and funny to read ... Briefly anyone can change this lazy fact and become a wise daily trader it's a real nice journey ... and i wonder how can someone invest in the most dangerous market which is Forex and they are lazy by doing there homework good ... one of my traders friends she was trading without watching charts only based on numbers.



This is why 95% of traders lose in Forex ... cos of human natural weaknesses "greed + fear + ego + laziness ... yet we didn't finish our study for tonight ... and human weakness is related in a very strong way to the weakness of the body...



6- Human body weakness, how can you become a brave trader if you are not brave in life? or in sport exercises? how can you have a fast reaction in trading if you don't have fast reaction in sport exercises or competitions? how can you manage your trades good if you can't control your heart beets good when you face danger? ... usually the majority of traders with time they become fat or so skinny cos they forget to eat, for fat ones trading might be the best diet ever hahaha ... anyway sitting for long hours online is not healthy at all ... or linking days without sleeping, i did try it few times linking days without sleeping and it's not good at all i managed to stay for 3 days without sleeping in my early trading time yet in the fourth day you start to feel like drunk and your body is shutting down alone ... also your brain start to function in a very strange way ... but it was fun to try it for few times to test my strength limits ... but now i sleep so good each night cos i close my trades each day before i go to sleep ... knowing what i lose and what i won ... this is why a daily trader need a full daily sport exercises ... and don't be lazy in your sport exercises where many go do body building "horrible sport" in closed gyms ... go run in nature, play games like football, basketball, ... and when you do sport exercises here's the magic trick ... push the limits of your strength each day to let your heart beat fast reaching the limits for 1 minute or 3 minutes no need for more ... 30 minutes of running or walking for those starting new to do sport exercises is enough each day as long you push to the limits for 1 minute each day ... test your heart before doing so if you are old ... also respect your sleeping times each night, never,never, never stay awake for your lost trades all night without sleeping ... cut your lose bravely ... and say to your self tomorrow will be another day with another trades opportunities... to recover and make reasonable profits ...



Briefly to become a brave profitable trader you need to keep your positive thinking all the way and to work hard all the time to become better with time, trading Forex is one of the hardest tasks in life, cos you might do lot of work and results will be bad ... and it's a long journey which need patience, discipline, control, braveness, honesty, transparency, humbleness,wisdom ...

"trading is about personality, to become a brave trader you need to have a brave heart & a wise brain"


Happy trade everyone

-

Tony

What is the correct answers to question 5 to be the 5% that win?

Some I answer yes, and some I answer no.... Point 5 to me is a little bit confusing.

nicely written

You could take the saying "95% of people lose in forex" and apply it to any profession..

"95% of people fail to become doctors"
"95% of people fail to become firefighters"
"95% of people fail to become cops"
"95% of people fail to become military"
"95% of people fail to become truck drivers"


"95% of people fail to become" is a rough statistic and one thats misinterpreted by many to mean 95% of active traders are losing money..


the only factual statement I can come up with is "95% of people fail to become traders" was created by pessimists

and IMHO.. if the glass is half empty.. so is your balance

And you can add much more.

Actor, writer, photograph...

The reason 95% of people lose while trading forex is because they don't understand that losing is part of trading.

Durring my 5 years in forex i met more then 3000 trader majority are asset managers ... as everyone run to me to save the account when things go bad ... i was in direct vision with the real truth about forex ... and yes my friend if you take 100 trader and make a study for one year fx profitable you will find 95% lose in forex ... many lose time for example they end up greedy and spend all year recover loses they did at first ... many lose profits and never learn how to protect profits ... so true that 95% show the weaknesses of human "to be or not to be" is the question to become a true survivor in life and in forex it need hard work and positive thinking all the way plus knowing the true truth about the investment world

Yet to be from those 5% who control there life by living good, it need hard work, discipline, hunger for knowledge ... 100% honesty all the way with your self and with other ... and to share knowledge with everyone ... because each human or trader have wisdom to share as each one of us is a trader with an unique story ... his/her personal forex story to tell

Forex is the hardest profession in life, a doctor study 10 years to become a doctor ... forex need time to learn it, cos it need to change all your life to control greed, fear emotion good and to master how to go with the market rhythmic moves ... the most important not to take a failing trade personal ... cos we all fail ... only success fx ones when they fail they gather forces again and start again and again and again ... yet losers when they fail one time they stop trying and cry next to the big fail

If you are a profitable trader i would like to salute your strength as a human and your discipline ... and for all your hard work toward becoming a profitable professional forex trader ... best of luck

What i've found is the markets basically sums up the entire field of psychology and life... mastering the markets / becoming successful in them is definitively the hardest profession to master...

in fact what I learned from FF to this day is basically the inner workings of life.. less on how to trade profitably.. I can definitively take my knowledge out into the real world and be very successful with what I have learned.. but if I can master forex/ the markets.. then I would feel like the master of world.. holding deepest understanding of life.


The points you make sum up why it is thus difficult to master forex.. the ability to be greater than the average mans mind is certainly a challenge

First 4 words... FAIL

Truth? Really? Prove it, or I call bullsh!t...

This myth has been debunked at least a thousand times.
Get a clue dude.

Being a techie at heart, I have a perfectly good explanation for this scenario...

The glass is not half empty, or half full, it is obviously just twice as big as it needs to be

Read all this article good

http://en.wikipedia.org/wiki/Forex_scam

(((According to the Wall Street Journal (Currency Markets Draw Speculation, Fraud July 26, 2005) "Even people running the trading shops warn clients against trying to time the market. 'If 15% of day traders are profitable,' says Drew Niv, chief executive of FXCM, 'I'd be surprised.' "[16])))

I would say easily, 95% lose because they dont have the most remote idea of what they are doing at the same time they think they really know.

or as is said in this article (I am not affiliated to this blog in any way):

"What separates the 10% that make money from the 90% that don’t?

10,000 hours.

In his recent book ‘Outliers’ Malcolm Gladwell describes the 10,000-Hour Rule, claiming that the key to success in any cognitively complex field is, to a large extent, a matter of practicing a specific task for a total of around 10,000 hours. 10,000 hours equates to around 4hrs a day for 10 years. For some reason most people that ‘try their hand’ at trading view it as a get rich quick scheme. That in a very short space of time, they will be able to turn $500 into $1 million! It is precisely this mindset that has resulted in the current economic mess, a bunch of 20-somethings being handed the red phone for financial weapons of mass destruction. The greatest traders understand that trading much like being a doctor, engineer or any other focused and technical endeavor requires time to develop and hone the skill set. Now you wouldn’t see a doctor performing open heart surgery after 3 months on a surgery simulator. Why would trading as a technical undertaking require less time?

Trading success, comes from screen time and experience, you have to put the hours in!"

From pivotfarm blog: http://www.pivotfarm.com/blog/2010/0...atest-traders/

Thanks for sharing always it's nice to learn something new, yet i might add 10000 hours of quality of focusing and willing to learn ... you will meet in life many people they tell you we know everything --- yet lot lot of things still need to discovered and need to be learned

Still in my 30s and i feel i need to learn lot of things and lot lot of interesting things need to test, know, live, feel the challenge of it and Forex is one

Unfortunately life on earth is short if you are lucky you get 70 or 80 years and you lose first 20 years for your body to become strong ... and your 20s to test life and become wise ...

Forex is an investment, and investing is a journey into life ... how you live your life it's how you will trade ... forex is about personality.

Not everyone are ready to change for the better ... you can put the naked truth ... and many will fear it ... other will try to run from it ... yet for a trader to become a better trader he/she must know all the truth about forex to know how to fight in it.

I must admit trading is not only about money ... its about to succeed where other's failed ... nature never was easy with human ... and human transformed life aggressivety into charts ... yet it's fun as long you invest money you can afford to lose and you train your self to be discipline ... it's a lovely challenging journey and a nice game

happy trading --- trader

1. No methodological edge.
2. No trading plan; inconsistent execution.
3. Lack of knowledge as to how/why prices move.
4. Failure to understand how statistical fluctuation affects performance.
5. Unsustainable or flawed MM techniques (martingale, nedging, etc)
6. Focusing on profit targets instead of risk management (see privatefr's signature above) and correct execution.

Having the right mindset (overcoming greed, fear, ego, addiction, etc) is not enough.

Loss & profit = give & take

Give > Take = Loss

Take > Give = Profit

Everyone just eager to take more and give less

Is it the TRUTH of TRADE

or the TRUTH of LIFE?

95% is a myth. Can we site a source for this number?

Traders lose because the game is designed for them to lose. It's rigged. You can't win at forex any more than you can win playing slot machines in Vegas - both are rigged to separate suckers from their money.

100% true Forex is a game designed to make 95% lose as central banks setup the moves each morning against the 95%

Around 95% of Forex traders are failures. !!!!!!!!!!!
Stands to reason why..... 99% are DAY & intraday traders.
Forex traders are conditioned from day one to be day & intraday traders, therefore conditioned to fail

Study any pair with a proven "trending" pattern on a Daily chart & you will find that retracements within the trend seldom surpasses any candle 2 days back. When it does, the result is more often than not a wave 2 or 4. OR. A trend change.
You gotta play them at their own game.