Forex Trading is a huge gamble and losing is part of the game.
There are many Forex traders who tend to lose in the Forex market even though they have the same training and are trading on the same time frame. You are bound to lose if you are in the Forex. However there are some traders who tend to lose more often. You might want to know why, so that you can avoid these small mistakes and ensure that your earnings are higher than the loss.
Why Do Traders Lose In The Forex Market?
Here are the top four reasons for traders losing in the Forex.
- They Do Not Stick With One Method Of Trading – In order to achieve quick money, the trader in you will want to use a method that comes with the promise of easy and quick profit. You will go for anything that will help you in a quick success, when you should go for a single method to that will help you make profit gradually. This attitude accounts for the most losses. Experts suggest that you pick up a method that has been in the market for a long time, try it, see whether it suits your method of trading and give time perfecting it. Select a method and stick to it for success.
- Trade On Lower Time Frame – The idea that trading on lower time frame chart will help you make more money is wrong! A lower time frame chart will give you more Forex signals, but also remember that the lower the time frame has less accurate signals. Using these charts therefore makes you vulnerable to losses. The signals in a higher time frame chart are made with more time. When you follow a 1 hour chart and you see a signal, you know that the price will not break out for at least an hour, but a similar signal in a say, 1 day chart will give you more information, where information has been gathered from the UK and US and therefore are more reliable.
- Make Bad Decisions While Watching The Charts All Day – Once you have started to trade the long time frame charts you must stop watching the charts the whole day. This habit of watching the charts all day is a very bad habit. When you keep watching the charts the whole day, you tend to enter trades when you shouldn’t or take trades off and take your profit when you shouldn’t (Over trading). You can avoid these mistakes if you watch the charts once a day. The market will behave the way it does even when you don’t watch it; therefore stop watching it and making bad decisions.
- Enter The Forex Market Without Training Themselves – The Forex isn’t an easy place to be in. You have to be prepared for the stint in the market. There are many traders who enter the market without any preparation. There is no place for emotion here, but many traders allow their decisions to be swayed by emotions. They don’t read the blogs and books written by the expert traders, to learn small little Forex tips that can go a long way to help them stay in the market and make huge profits.
It is easy to make mistakes at the Forex and lose your money, however if you know these frequent mistakes made by other part-time Forex traders and avoid them, you are sure to be successful.