Why So Many Forex Traders Fail – And How Not to Be One of ThemWhy So Many Forex Traders Fail – And How Not to Be One of Them
As a professional currency trader I know how difficult it can be to make money on the forex market. It is a well known fact that most people who indulge in forex trading online lose – just ask any forex broker how many depleted, dormant, trading accounts they have on their books.
The internet is awash with advertised failure rates of between 80% – 95% concerning those who have tried and subsequently failed at the trading game. Although there is no official figure, one can nevertheless conclude that it is a very high percentage.
So why is this so? I believe it is to do with a number of key factors, which I will outline below.
A trader’s unrealistic expectations
I believe that many people stepping into the forex forex expert advisor arena for the first time have a completely unrealistic view of what is involved in being a successful trader and have unrealistic expectations of how much time, money (capital) and effort is needed to achieve success. There are no doubt many reasons why people think that forex trading is an easy way to make money, but I believe the unrealistic expectations of many self-traders are mainly created by those ruthless web marketers of various forex trading systems, automated trading robots, and so-called forex tipster gurus. These callous promoters focus their marketing efforts at gullible new traders, whilst claiming that making serious money with their product or service requires little more than a few mouse clicks.
These products and services form what I call the Great Online Forex Swindle or GOFS. What is needed here is a little reality check! Quite simply, if all these products were that good, we could all give up our jobs and just let the money roll into our bank accounts just after making a few mouse clicks, whilst the major global banks could fire their million-dollar traders and replace them with $97 automated trading robots. The sad fact is that these things, over time, do not work!
Lack of forex education
Another fact is that many traders have simply not had appropriate forex education or training, and as a consequence, eventually fall on their sword having confronted the realities of this unforgiving market. Note that I am not talking about general education here, I am talking about forex education. Currency trading is like any other trade or profession – you simply cannot just start to trade forex successfully without any kind of appropriate education, practice or training, but people think they can, and soon learn otherwise. It is trench warfare out there and one simply needs to be prepared!
Another major reason for failure is that many people are too emotional when it comes to trading and let their hearts rather than their heads do the trading. Forex is a numbers game in many ways, and one needs to apply factors like facts, logic, commonsense and experience, rather than letting killer emotions of greed, fear, hope, anger and pride wreck their trading accounts. I would go as far to say that one has to have a particular type of character to succeed at forex – not all of us are cut out to be traders, particularly those who lack what I call emotional discipline. Let’s face it, we are dealing with money here and it takes a particular type of character to stay cool, calm and collected when things start to go wrong