Why do traders lose money?

in #hive-1679222 years ago

Many people lose their money in forex and don't know exactly why, that's why I decided to clarify these key points to understand why people lose their money in forex guys. Not only in the forex market, but also in the futures market, because this is something that brokers have to let you know before trading, for example XM broker always warns about the risk of trading with leverage, even without leverage we can lose our money.

One of the most known reasons why people lose money in forex is simply because they do not know which broker to register with, this is of utmost importance when trading with real money, most brokers offer DEMO accounts, so we can practice our financial operations, in this way we can make our operations and put into practice our operations.

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Psychological trade is undoubtedly the most important.

Without a doubt psychological trading is without a doubt the most important thing and from my point of view I think that 99.99% of traders who are not well psychologically lose 100% of their money, this is all that happens with traders who are not well prepared psychologically and when this happens we simply have to solve the problems that we face in our day to day life. Problems at home are often one of the main reasons why we lose money, it seems unbelievable but it is absolutely true, many experts say that trading with stressful situations, anxiety can bring many problems to your operations to your personal finances.

Forex scams

I should also mention that forex scams are very well related to losing money, but I would like to admit that there are very few people who lose money due to scams, scams are very common, but for a person who doesn't know much about it it can turn out very bad.

One of the main scams that happen in Forex is that they manipulate prices, recently I was talking to a contact who is an expert in this.

I will show some of the things he told me.

"If you want to invest in Forex be very careful, always trade with Brokers that are regulated with a first level financial entity, beware of regulations in tax havens."

I want to make it clear that many stockbrokers are regulated in tax havens, this is what has led to many scams.

I honestly don't know how companies can circumvent the law and continue to practice these types of scams. I am not a lawyer and maybe this is why.

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The importance of a trading plan

The importance of having a trading plan is extremely vital for us, this is simply something that we all should have in mind, having a profitable strategy and a goal in trading is something that we simply have to have in mind in order to succeed in this, we cannot just trade by luck, I recommend always having a goal with your operations as well as following a strategy, many times I have traded by luck and most of the times I have lost my money very easily.

Not having adequate knowledge of the trade.

Not having a proper knowledge for trading can be something that simply lead us to a sure bankruptcy, I recommend taking courses and practicing a lot in DEMO accounts, this is very important to understand our strategy and practice with fake money, so when we have real money we can make the corresponding trade.

Nowadays there are free courses that we can watch, there are even commercial signals that we can find at a low price, even for free, I think this can be something profitable as long as we know what we are doing.

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From the desk of Carlos Mendoza, all rights reserved. ©

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About 90% of retail traders lose money. I just don't think I will ever be the 10%; that's why I don't trade

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Exactly more than 90% of traders lose their money when trading these assets but less than 10% lose money in scams, because scams are easy to find due to reviews.

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Yeah, the odds are not in favor of retail traders, for sure

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This is amazing, I love how you point every step out in details. Because every point is very important to note that's why when you missed one in the market you will lose money. Forex is more of psychology it has to do with the mind.

Thank you very much for your comment, I always bring financial things for the community, it is a pleasure to write for all of you.

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Thank you sir I believe you are a forex trader too right?


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Officially, 80% to 90% of market participants lose money. This can also be interpreted as 80% to 90% of market participants have no idea what they are doing...

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