Why do Traders Lose? - page 4

New comment
 

Brokers don't trade against their clients. Clients themselves trade against the market.

 
arigoldman:
Brokers don't trade against their clients. Clients themselves trade against the market.

"Brokers don't trade against their clients"

Come on - you can't be serious

 
techmac:
"Brokers don't trade against their clients" Come on - you can't be serious

They trade against almost all their clients. That was the whole point of rates rigging and that is why all those banks payed all those billions of $ penalties. All the rigging was done to make banks/brokers money at the expense of their clients - which means : they were and are trading against their clients

 

Funny to see that someone believes that brokers do not trade against their small clients (and some are trading against big clients too)

 
whisperer:
Funny to see that someone believes that brokers do not trade against their small clients (and some are trading against big clients too)

Sweet dreams of honest brokers and banksters ...

 

Generally, Forex is indeed for those people who are willing to make more money very rapidly. This is the business platform where it is conceivable to create huge money that you want as your wish. Due to having this life changing prospects now all over the world from many people are joining this trading platform increasingly. I want to be a professional trader for earning more.

 
Forex is indeed for those people who are willing to make more money very rapidly

That is reason No1. for so many losers

 

Only those traders lose that have limited knowledge of market and the number is huge of such traders. Most traders try to generate large profit from small account which causes their down fall.

 

According to my trading involvement, I have seen many times that most of the new Forex traders are keen to trade in a high leverage. And they trade in a high lot by taking big leverage. As a result they fall a great loss and sometimes lost almost their whole balance.

 
april:
While trading in the Forex is simple and accessible to anyone around the world, it does not mean that each trade will result in profits. Opening a position on a currency pairs brings with it a certain level of risk that it will end up moving unexpectedly in incurring traders a loss.

This risk, however, can be managed by proper strategizing and execution since many losing trades are the result of undisciplined or information lacking traders. Some of the most common mistakes that lead to losses are the following:

Guessing instead of Analysing

When picking a currency pair to trade, there are many options available to determine which one can be the most profitable. You can either study its chart and price movement to find out what trend it is currently following or use economic indicator as clues to whether what direction it will take in the near future. Losing trades are those that skip this all important step, resorting instead to pick one at random and hoping it will turn out to be a good choice.

Disregarding the Plan

Traders should always know when they are willing to exit a position to either cash in their profits or cut off their losses. Sometimes, however, excitement or fear can take over and lead to traders not following their original plan. They could end up overstaying to a point that they lose what profit they already have gained or closing a position too early because it started to move in the opposite direction they wanted it to.

Not Using Stop Losses

Stop losses is a powerful risk management tool. By placing them on each trade you make, you can assure yourself that you will not lose more than what you are willing to risk to make a profit. This way, you can leave your positions open to garner larger profits. Failing to use stop losses means that you are leaving yourself vulnerable to losing your entire account.

Here are ten fatal errors made by misguided traders who are destined to fund the accounts of more skilled traders.

  1. A trader must have a trading plan with well-defined entries, exits, and position size before they make any trades. Trading with no plan creates random results, and the profits that are won as a result of chance will eventually return to their rightful owners.
  2. Traders must have an edge to be profitable. The traders that have discipline, have done their homework about historical price action, and stay in control of their emotions will make money.
  3. The biggest mistake that the majority of traders make at all levels, is that they trade too big. Big position sizes cause emotions to run high, infringing on reason. Big losses are also more financially and emotionally devastating. The position size of a trade should never put a trader’s lifestyle or trading career at risk.
  4. When the markets open, the trader must have the discipline to follow the plan they created when the market was closed. No system will work if the trader does not have the discipline to follow it.
  5. When a trader’s desire to be right is greater than the desire to make money, they will illogically let a losing trade run to avoid admitting that they are wrong.
  6. Fear of giving back a small profit will cause a trader to miss a bigger winning trade. Most profitability is based on the big winning trades. A winning trade should not be exited until there is a good reason to do so.
  7. If a trader does not take their original stop loss, they will allow small losses to become big losses. Big losses generally are what cause a trader to be unprofitable. Many good trading systems become profitable simply by removing the big losses from the trading results.
  8. Traders that do not account for events outside the known bell curve can be ruined. Events that have never happened before can happen. Hedges, stop losses, and position sizing are the insurance policies against the sudden risk of ruin.
  9. Traders with too much hubris will eventually make a decision that insures a fatal trading result.
  10. Personal predictions have no value, because the future does not exist in the present moment, no matter how strong a trader’s convictions.
1234567
New comment