Why Do Most Forex Traders Lose Money 

 February 13, 2016

By  Advanced Strategies

Why Do Most Forex Traders Lose Money
Why Do Most Forex Traders Lose Money

Actually, this does not just limit to Forex traders. It applies to all traders including Stocks, Options, and even commodities traders. An astounding 96% of traders lose money – and it could be due to many possibilities. Personally, we think these are the most common reason why traders lose money, not in any order.

Unrealistic Expectations

While trading is an extremely rewarding profession, it’s not as easy as what most traders think. It’s a skill that takes time to develop. Most traders come into the trading world thinking that they want to make fast money. That’s what gamblers think. Just know this… if Warren Buffet averages 25% per year ROI and George Soros does 23% per year ROI, do you really think anyone else out there can consistently do 1000% per year. Set the expectation right. 20% to 25% is doable. 30% is perhaps already stretching it. Get the expectation right to be on the right path.

No Proper Trading Education and Foundation

Most traders come into the trading arena without having the right expectations and without the right training. They were lured in by hyped up marketing materials that make trading look easy. After all, everyone can trade. It’s just clicking a buy and sell button to enter and close a trade. How difficult can that be?

Don’t fall for this. If you are serious about building a strong foundation, then get enrolled into a proper trading course and follow through to build a strong foundation that will last for a lifetime. If you are interested, we have our own trading course that you will find reasonably priced and extremely comprehensive. Click here to learn more.

Going into Live Trading too Soon


Most traders are too eager to start making money that they go straight into live trading and end up blowing up their account. Sadly, this is all too common. Some traders that we know blow up their entire savings account. This is reckless… absolutely reckless. Remember, a pilot has to go through hours and hours of flight simulation before they are allowed to co-pilot an aircraft.

As traders, it’s the same. Use a demo account as a way to hone and refined your trading skills before going live. In this business, we are going to make a lot of mistakes – so why not start making those mistakes using fake money. We suggest at least 1 year of demo account trading. And before you go live, be sure that you are already making money consistently on your demo account before even thinking of going into trading for real. If you take our guidance here, you will thank us for it. If you don’t, more than likely you will blow up some live accounts and that’s something that might prematurely end a wonderful career. To open a demo accounts, click here to use our recommended brokers.

No Real Trading Plan or Business Plan

Most traders don’t treat trading as a business. If you think about it, trading is a business and should have a long term plan. Instead, many traders look at trading transaction by transaction. Any trader who desire to success must have a solid, duplicable and repeatable process. A system or strategy that they can use over and over again to generate profit like clockwork. Yes, there is no 100% trading strategy but any successful trader will know that if they stick to their place, they will generate positive results in the long run.

Successful traders enter into any trade with an end envisioned in mind with clearly defined entry price, take profit price and even stop loss price. And they arrived at these prices through a systematic process. If you have a process in place, then it’s time to refine it and be consistent. Use it a  framework to improve your process – like improving your business process. If you do not have a framework in place, it’s time to solidify your foundation. We have a Professional Trading course that you will find incredibly comprehensive. Click here if you want to learn more about building your trading business the right way.

Why Do Most Forex Traders Lose Money – there might be plenty more reasons out there for traders to lose money in Forex. However, based on our own experience, we think that the above are most common reasons why most traders lose money.




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