The FX market is biggest financial market in the world though the sum of money available to be earned from it is very high but so is the risk factor. The market looks simple outside but it is very complicated inside as a result only 4 per cent of the new traders who come into market are able to make sustained success and this is why do most people lose trading forex.
The basic cause of losing money is that traders jump very early in a deal without having sufficient knowledge about it. A large section of traders enter the market without doing any practise on a demo account or practising technical or fundamental analysis.
Whenever a deal is initiated, a trader needs to decide the amount of leverage he will invest. The amount of money he will gain or lose will be decided by the amount they bet per unit on a trade. It is not advisable to invest very low or very high leverage. If the investment is too high, the risk of cleaning out your account is also high. On the other hand if the investment is too low, the gain will be low and require more movement and higher risk to reach the target of the trade.
The strategy used to analyse the market much be correct. A trader should neither depend completely on fundamental analysis of the market nor should he follow the technical analysis alone. To get an idea of present and future state of the FX market one should follow a mixture of both strategies.
Another case of failure is emotions which obstruct the rational and correct thinking procedure of humans. Trader should never get emotionally attached to any deal because it may not allow a person to take the right decision.
Greed is the first thing which should be totally avoided by a trader because it may aggravate to invest a higher amount in the deal by seeing the rising exchange price, but sometimes things go exactly opposite from expectations.
There is always a correct time to enter and exit the market which needs to be decided correctly in order to be successful. Most traders either don't give much attention to the trends or signal or they don't have any knowledge about them. A deep study is required to know whether the market is in trend or range, before initiating a deal.
Success may take time to come and the trader should be tough enough to face the challenges. Most traders don't have enough courage to withstand failures that why do people lose trading forex. One may need to face a number of problems before gaining profit and from every failure one should learn something.
The basic cause of losing money is that traders jump very early in a deal without having sufficient knowledge about it. A large section of traders enter the market without doing any practise on a demo account or practising technical or fundamental analysis.
Whenever a deal is initiated, a trader needs to decide the amount of leverage he will invest. The amount of money he will gain or lose will be decided by the amount they bet per unit on a trade. It is not advisable to invest very low or very high leverage. If the investment is too high, the risk of cleaning out your account is also high. On the other hand if the investment is too low, the gain will be low and require more movement and higher risk to reach the target of the trade.
The strategy used to analyse the market much be correct. A trader should neither depend completely on fundamental analysis of the market nor should he follow the technical analysis alone. To get an idea of present and future state of the FX market one should follow a mixture of both strategies.
Another case of failure is emotions which obstruct the rational and correct thinking procedure of humans. Trader should never get emotionally attached to any deal because it may not allow a person to take the right decision.
Greed is the first thing which should be totally avoided by a trader because it may aggravate to invest a higher amount in the deal by seeing the rising exchange price, but sometimes things go exactly opposite from expectations.
There is always a correct time to enter and exit the market which needs to be decided correctly in order to be successful. Most traders either don't give much attention to the trends or signal or they don't have any knowledge about them. A deep study is required to know whether the market is in trend or range, before initiating a deal.
Success may take time to come and the trader should be tough enough to face the challenges. Most traders don't have enough courage to withstand failures that why do people lose trading forex. One may need to face a number of problems before gaining profit and from every failure one should learn something.
About the Author:
Getting involved withforex leveraging can be a risky business and unless it is absolutely neccesary should be avoided. Trade forex safely through a qualityforex club and build your wealth steadily.. This article, What are the Reasons That People Lose Trading Forex is available for free reprint.
No comments:
Post a Comment