Reasons behind Losing Money in Forex


    Forex trading requires a lot of dedication. 92% to 95% of people face severe losses in this field and leave the market. This is an unpredictable place where big change can happen within a short time. Without making mistakes, you will not be able to be an expert. But, people have to learn from their errors so that they can avoid these in the upcoming trade. Various types of reasons behind the failure of the traders. Let’s know about these.

    Low Capital

    Sometimes, people arrive in the field with a low deposit which can create difficulties for them. Many brokers offer them excessive leverage for trading. By taking this, they lose their account balance. Mostly, beginners fall into this trap as they do not know about the marketing policy. Fresher should not take risk of more than 1% of the capital. Remember that at least $ 1000 is necessary to trade properly in this field. If a newcomer does not understand the policy, he or she can practice through the demo account to understand this. Many people in Mena zone has learn to trade with low capital by using low capital.

    Poor Risk Management

    This is one of the major reasons behind the failure of the investors. The only way to survive in the field is to manage the risk properly. People are required to know how to place the stop-loss and take profit accurately based on the price movements. If the cost is high than the earning amount of a person, then he or she needs to analyze their strategy and the current situation to identify the main problems. Many investors apply complicated Forex business strategy which might cause trouble. You need to use a simple plan that you can follow properly. Executives execute a sound plan with a practical target so that they can take steps according to it. Remember, Forex market is dynamic in nature. Unless you do it in a strategic way, it will be tough to become successful.

    Over-Trading Tendency

    Over-trading can finish the capital of the traders within fewer moments. To make more profits, people prefer to trade more. There are lots of opportunities in the market. Traders need to grab the opportunity which can add value to their business career. Most of the time, fresher do this to recover the losing money which is a foolish activity.

    Not Creating a Fruitful Plan

    An efficient strategy plays an important role in developing a career in the Forex market. An investor should spend time to know how to create a fruitful strategy. Some beginners also execute the proven plan to minimize the cost which is a better choice. But, they have to make some changes in it based on their preferences and the present scenario of the business field.

    Not Having a Clear Exit Strategy

    People need to have a clear exit strategy so that they can close the position with a good profit. This happens that a person expects a lot of profit and hold the position for a long time. For holding the position, he or she needs to pay. This also increases the cost. Position Investor must have an exit plan as he or she holds the trade for a day or week.

    Not Accepting the Mistakes

    No one can be established in the Forex market without making any mistakes. This is not a big issue. But, people need to admit it. Most of the investors do not want to accept this. This does not allow them to move on to the next one. If you see that your strategy is not working properly and you are facing the losing streak continuously, you need to assume that this is a bad day and, you have made errors. If the businessman does not admit it and tries to trade more, he or she will not be able to control the situation.



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