Could the number one reason why 95% of forex trader lose money be because of greed, after all greed makes traders to over-trade, over-leverage until they get a margin call. After all, the United States real estate market almost collapsed due to over leveraging caused by greed. No, greed could be the number one reason, but it's not.
How about discipline, I mean discipline is the single most important factor that you must have in order to become a successful forex trader. No, it's not discipline according to the recent research that has been done.
What about lack of proper training or lack of proper understanding and education about how the forex market works, because if you don't know how the forex market works how can you become profitable, after all you are trading against professional money managers backed by a team of risk analysts and who might even have access to insider trading information.
How about not having a trading plan after all successful businesses must start with a plan. And your trading plan is like a map of how you will make money consistently in the forex market. And if you don't have a plan then you will just be gambling your money, and in gambling the house always wins that's why 95% of traders lose money. No, it's not the number one, its close to being the number one just like the above 4 but it's not.
So, What is the number one reason?
So, the number one reason why 95% of all forex traders lose money is because of under-capitalization. Yes, under-capitalization.
If you are going to open an account make sure you have sufficient trading capital. What I mean by sufficient trading capital is:
If you are going to open a forex micro account where 1 pip equals 0.1 Dollars, open with a minimum of 1,000 Dollars.
If you are going to open a forex mini account where 1 pip equals 1 Dollar, open with a minimum of 10,000 Dollars.
If you are going to open a forex standard account where 1 pip equals 10, Dollars,open with a minimum of 100,000 Dollars.
Did you get that, read it again, why? because it's the number one reason.
Instead forex traders open standard trading accounts with 10,000 Dollars and start trading standard lots, without fully understanding the concept of leverage and margin and how these two factors can impact on their trading capital.
http://www.forexmarketscience.com/ is an introduction to foreign exchange trading, designed to provide tools, information and resources to forex traders who want to gain more knowledge of how the online forex market works. Visit and learn forex trading.
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