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Attachments: Top Reasons Why Most Beginner Traders Fail
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Top Reasons Why Most Beginner Traders Fail

Newbie fails in this market because they do not give time to their learning and demo accounts and also they are not serious about the market. Learning is not the only way to be part of this business, learning the right and mature way is important for work.
Quoting Butterscotch
Newbie fails in this market because they do not give time to their learning and demo accounts and also they are not serious about the market. Learning is not the only way to be part of this business, learning the right and mature way is important for work.
I agree. So many new Forex traders try to make money from here without learning. As a result they become loser due to lack of exact trading knowledge. It’s a common thinking. I think by and large lose because they trade with emotions and don’t know how to manage money in Forex.
There are obviously many reasons for this, but I believe one major reason why we see majority of the traders fail is because of lacking in discipline, if we work with proper way and approach then we will not fail as rapidly as some people do. I feel it is next to impossible to succeed for us that we work without discipline, so we need to get this perfectly or else we could face a lot of trouble and problem.
Quoting Fedricks
There are obviously many reasons for this, but I believe one major reason why we see majority of the traders fail is because of lacking in discipline, if we work with proper way and approach then we will not fail as rapidly as some people do. I feel it is next to impossible to succeed for us that we work without discipline, so we need to get this perfectly or else we could face a lot of trouble and problem.
You have emphasized on trading discipline , I also admit it. but How do you expect a real discipline from a newcomer who has no experience about the volatility of this market ? newcomers lose because they don’t know about this market completely and trade always with emotions. I suggest them please Go pips school for acquiring the real experience about Forex and then trade after in a demo account but not live.
Yes, newcomers always fail to control emotions when trading practically. They trade again and again keep pace with markets movements. As for over trading they lost their equity and at last they blame this market but don’t think at all their immature trading habits.
Quoting Kanewilliams
Naturally, all of novice traders start their trading with zero level! In addition, Forex trading is a knowledge based business! So, which new traders try to make real money by live trading before acquiring enough knowledge, they may suffer in their live trading account! Thats very simple! Yes, I also made common mistakes in my demo, but now my long term trading experience helps me to recover my bad trades!


That means, you are on the way of success! So, what’s your trading strategy for trading? I am till now learning and confuse about appropriate trading strategy of trading, please boost me!
Quoting DarrenLehma
{quote} That means, you are on the way of success! So, whats your trading strategy for trading? I am till now learning and confuse about appropriate trading strategy of trading, please boost me!
Here is boost for you.

1. Ignore your leverage. Trade as small as you can.
2. Learn price action. Many many threads on this.
3. Understand the business you are in. The broker is not there to help you. They are there to take your money away from you.
4. Do not over trade. See point three.
5. Learn fundamentals. What is FOMC and NFP? What is a carry trade? What does inflation do to a currency? What is a Central Bank?
6. Learn margin and what it is.
7. Do not think of trading as a source of income. You cannot grow your account if you are constantly dipping into it.
8. When you get a system, stick to it! Give it time to work. Think in terms of quarters instead of days.

That is about all I have. Good luck and trade well.
If you are good at something, never do it for free--Joker
Quoting jmn5611
{quote} Here is boost for you. 1. Ignore your leverage. Trade as small as you can. 2. Learn price action. Many many threads on this. 3. Understand the business you are in. The broker is not there to help you. They are there to take your money away from you. 4. Do not over trade. See point three. 5. Learn fundamentals. What is FOMC and NFP? What is a carry trade? What does inflation do to a currency? What is a Central Bank? 6. Learn margin and what it is. 7. Do not think of trading as a source of income. You cannot grow your account if you are constantly...
Thank you for great information.
Beginners should observe all of these , if they want to avoid loss. I think from all 3 no is more better ,

we the beginners should take a broker just a trading platform not much more than it.
Why not? We have to emphasis a reliable support form a credible trading broker , because the broker can affects the result of our trading with certainly.
[quote=jmn5611;9958481]{quote} Here is boost for you. 1. Ignore your leverage. Trade as small as you can. 2. Learn price action. Many many threads on this. 3. Understand the business you are in. The broker is not there to help you. They are there to take your money away from you. 4. Do not over trade. See point three. 5. Learn fundamentals. What is FOMC and NFP? What is a carry trade? What does inflation do to a currency? What is a Central Bank? 6. Learn margin and what it is. 7. Do not think of trading as a source of income. You cannot grow your account if you are constantly dipping into it. 8. When you get a system, stick to it! Give it time to work. Think in terms of quarters instead of days. That is about all I have. Good luck and trade well.[/quote

Best advice, My eyes opened when I realized I had to trade small. Not because you don't have the gut to trade bigger but because you don't want to let any emotion kick in with your decision making. I want to keep the fluctuation in my equity as small as possible, that way I can trade like a robot.cheers!!!
Special one
You made some very valid points!

Quoting jmn5611
{quote}
1. Ignore your leverage. Trade as small as you can.
I never understood why people blame leverage. Having leverage is a good thing because it means you can leave more of your money in the bank account. Having an adequate trading size is what matters. Maybe i misunderstand what you mean by trading as small as you can. One should not go to small. You would want your time trading spent well. If you trade with a Risk of 0.01% even with a very good RR your gains would be very small. Its better to adapt the money managment to your performance and tolerance for max. DD. Also do note that trading systems differ. While trading systems with a favorable RR often have a bad hit rate (often trendfollowing), you have to use a different MM than with systems with a lower RR but higher hit rate (often range trading). Both approaches could work, but you have to adapt your MM..


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2. Learn price action. Many many threads on this.
Good advice.

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3. Understand the business you are in. The broker is not there to help you. They are there to take your money away from you.
I would not have such a negative view. While there are certainly crooks, i would not say there are no good brokers that dont cheat you. I was reading the reviews of my ECN broker and usually the people who complain about their broker cheating them not following these simple rules.
-avoid trading high volatility news (liquidity is low, so slippage, high spreads and high volatility is likely)
-avoid trading exotic pairs (similiar reasons, because of low liquidity, trading costs are very unattractive) better stick with majors.
If you are trading majors pairs not during news and on a high timeframe, its very hard for your broker to cheat you.
Beside you always have the option to switch to other assets such as futures.

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4. Do not over trade. See point three.
Never grasps that point anyways. Just follow your system and stick to the rules. If trade opportunities appear, trade them, if not: stay on the sideline.

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5. Learn fundamentals. What is FOMC and NFP? What is a carry trade? What does inflation do to a currency? What is a Central Bank?
Good point, learn the essential fundamentals that drive to market on the longer term.

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6. Learn margin and what it is.
Not really worth mentioning it. Would call this trading basics. Like know where gas and brake in a car are.

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7. Do not think of trading as a source of income. You cannot grow your account if you are constantly dipping into it.
Good point! People always estimate the impact of the compounding effect.

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8. When you get a system, stick to it! Give it time to work. Think in terms of quarters instead of days.
While system hopping is not a good thing, one also have to know when to quit a system.
I think its more important to have an trading logic instead of just a system. People often trade a system that they dont understand. Understanding the logic behind a system is what matters. Especially trend following systems at its core are very simple. Basic MA would be enough. What matters is an understanding of the PA and S/R+important price levels, trading times, news etc. At core the system is simple, its all the details and the interpretation of the PA that matters.
Also a lot of people are studying when their trades are working. What is more important is to study the situations when your system is failing.
Thank you very much H96. Nice post you have , its effective really
Quoting JamesFaulkn
Thank you very much H96. Nice post you have , its effective really
Your very welcome. I really see a lot of people always trying to find a better system using even more sophisticated indicators.
Luckily i didnt spend a lot of time finding the holy grail indicator. What one should not forget is that all indicators are based on price. Indicators can only work with the data you get from MT4 which is price only. Some people might argue that there is volume as well, but its from your own broker only. I dont have the excact numbers but as far as i remember the whole FX retail market is something in the range 5-10% of the whole market plus its very segregated. So even if you get the volume data from a big retail broker (i.e. FXCM) you would have absolutely no significant information about the whole volume. Hopefully in the next few months i would get my hand on some EBS Data and see if there are some insights to gain, but even EBS is just a small share of whole market.

Anyways, i think if you to trend analysis from top to bottom (higher tf to lower timeframe), know how S/R works, know the relevant psychological levels (round numbers,highs and lows) then its just about learning PA and how good you are in interpreting it.
there is only one real reason why traders (beginners or experienced folks) do fail. it is called a lack of net positive pips. if this is not in present, no money can ever be done. it is useless to speak or discuss anything, if net positive green pips are not on the table...

after one has some green pips in the system's baskets, money management, emotions management, greed and lust management can be aplied, eventually.
Maadik Hugiis. IQ 69.
Generally all traders we have beginners or experience do fail due to our insufficient trading knowledge. But it depends. Experience traders don’t fall a great loss at all due to their emotions but beginners don’t able to control their greed and emotions that are the main reason behind their losses.
All the new traders should start by practicing demo accounts because that is more helpful in learning forex processes otherwise many new traders directly start with funding to live account and loose money while testing the trades so better to test those things on a demo account.
There are so many reasons why any trader fail or struggle, but the obvious one is lack of acceptance of mistakes, if we keep on piling on column of mistakes and don’t correct them then we will only struggle. So, our aim and biggest look towards thing needs to be correcting our mistakes since that is how we will move forward towards gaining.
I think I can speak on this thread. I believe it's not having enough confidence in their strategy. That's why traders go from strategy to strategy, because they are not sure whether their strategy really has an edge or not. It may look like it does on the charts when you're looking backwards, or even on demo, but then they go and try it live and it just causes loss after loss after loss. Add bad risk management to this recipe and kaboom. There goes your trading account.

Also, trading accounts that are too small is the second thing. Risking 1% on each trade on a $500 or $1000 account feels insulting. Even with a 3R win you are looking at a $15-$30 gain. That frustrates traders so much that they throw the risk management out the window and start betting sizes that are too big for the account and then blow up.
Quoting Madinvestor
I think I can speak on this thread. I believe it's not having enough confidence in their strategy. That's why traders go from strategy to strategy, because they are not sure whether their strategy really has an edge or not. It may look like it does on the charts when you're looking backwards, or even on demo, but then they go and try it live and it just causes loss after loss after loss. Add bad risk management to this recipe and kaboom. There goes your trading account. Also, trading accounts that are too small is the second thing. Risking 1% on...
Indeed! The 1% isn't for everyone. In my opinion this is such a tremendous knowledge gap in risk management. Most beginners enslave themself and follow a rule which, most of them, doesen't even understand.
Quoting M.Goldstein
{quote} Indeed! The 1% isn't for everyone. In my opinion this is such a tremendous knowledge gap in risk management. Most beginners enslave themself and follow a rule which, most of them, doesen't even understand.
Exactly. 1% is an arbitrary number. How much you risk should depend on your system drawdown expectancy and your personal appetite for risk. Most beginners have no clue about either.
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