Why do Forex Traders Lose Money

[killbill1234]

flow of the money is always from amateurs to PRO's on financial market ... no matter if it is fx, bonds or stock market ----> that is RULE from years !

 

[bigmistake]

Forex trader lose mony for serveral things but I think lack of Forex knowledge would be the main reason.
If you can't understand what it is, how can you beat it?

 

[ph_trader]

It is commonly known that most forex traders fail. In fact, it iss estimated that 96 percent of forex traders lose money and end up quitting. so I want to ask that what reason behind it? Please share your experience about it.

there is always a risk in everything we do, lets just say most traders tend to think forex is an easy way to earn money and dive in with lack of tools to make a good profit like KNOWLEDGE and PATIENCE its a common pattern for poeple to want to make an easy buck

 

[Brumby]

The starting pool base has plenty of fools and their money.

 

[Jack Francisco]

For many reasons traders loss money those are greed,emotions,fear and many others but most of the traders loss money for greed because it is most harmful for traders and i am always trade with confidence and honesty for that i can make profit regularly.:clap:

 

[bigboyfx]

I every business, people are bound to lose or win. Some lose, while others win. Those who lose will also win one day. This is life and there is nothing you can do about it. With regards to forex, anyone can lose, even experts lose when they make the wrong decision. So the two main reasons why traders lose are wrong decision and lack of knowledge.

 

[WR1]

How many of us will succeed in Forex? | Forex Strategies & Systems Revealed

 

[up-down]

If you know how to do it you have to have guts, as well as correct timing you can make a HUGE amount of money. Or you can lose your shirt
See someone's recent results here

 

[TheLastBear]

Another reason is that they trade in demo accounts, think they learn how to trade and when they go live they will go bust rather quick.

 

[DaisieRon]

It is because lack of attention and experience. Once you are familiar with the Forex market, then surviving wouldn’t be a difficult task.

 

[Argentum]

it's not 96%, it's 99.6%,

and 2 main reasons, either the trader does not have a strategy with an edge, or if they do, they are unable to wield it

.........are you selling something?

Right about the number, but the reasons are more complicated and complex.

I would add as one of the reasons, that the whole FOREX business is built around a Casino Business Model giving false promises like "The Euro Is Easy to trade" or "Make money trading Forex" or just showing how much money their "Top Traders" made in the last 30 days, and thus most traders join impulsed by some kind of "Ludopathy" of similar Attitude...

Of course its not the Trader's fault. I would never blame the Trader. That's the whole slogan to justify this business. "It's the trader's fault"...

A lot of Forex Brokers, have been penalized during the last few years, because they are built over a Casino and Betting Business Model.

So, that's the main reason, why the 99.6% number is almost the same as a Casino and a Sport Betting Sites. I think that in Poker, the edge is even better and you have more chances of winning than in Forex, but someone correct me if this is not true, but I remember reading the number was more favorable.

Also, let me say that Retail Forex traders do think that they're "investing" on a skills based assumption rather than gambling. They think that using MT4, indicators, signals, EA's, even price action, etc, is part of a system that will predict the future. None of that works, because every single indicator lags big time, and thus, it's set for failure. When they are lucky, they could make a good trade, but long term, they finish losing it all. They are gamblers, but most of them don't know about this. And when they lose their account, they are told that it's their fault. The most pathethic part is most of the traders finish believing it, that they lost because of their fault. It's never their fault, because nobody can predict the future in the first place. And no, you can't have tools to increase your Edge. And if you consider having an "edge", then you are in the same situation as a gambler, looking for an "edge" in Blackjack.

The most scary part is when you look who represent the 0.4%... The vast majority of that 0.4% are probably not regular traders, but part of the market makers or people with inside information of Financial Companies...

So, that let's the chances of winning to 0.1%.

But even knowing this, people still open an account, send money to the brokers, and lose their accounts.

And man, I'm not just talking about people who don't have a clue about the business and open an account believing in a get rich quick sheme. Im also talking about people who took Lessons with so called "PROs" (just authors who could never do a dime in FOREX and try to make some bucks selling books), studied the market for years, read dozens of books, etc etc... They still will lose money.

I think that the more you study the FOREX market, the more convinced you will be to stay away off this and go trade something else, like Stocks or Futures, and trade stocks or futures you know well, and just to diversify your portfolio.

In forums, you will find a lot of people defending the business, but check who they are? Almost none of them make a living Trading Live Forex. They live and make some money with everything surrounding the Forex Business, be it selling forex stuff, pdf, books, skype lessons, mt4 programming, are PAID Posters or employees of the Forex Brokers or just are webmaster affiliates of Forex Brokers.

Try to find a Forex Trader that did a living of trading online forex for the past 3 years... maybe 1 in 10,000 if you are lucky.

 

[michellesmith]

Because they give up too easily. Before trading, make sure that you researched online and forex trading well. Familiarize yourself with the stock market as well.

 

[the hare]

that's the main reason, why the 99.6% number is almost the same as a Casino and a Sport Betting Sites.

They won't like that at all !

The last time I wrote something similar, the post was deleted in under a minute, but its the undeniable truth.

I don't entirely agree about not being able to find an edge. You just have to think a bit differently, and there's one or two here at the zoo who have got it figured out.

 

[Argentum]

They won't like that at all !

The last time I wrote something similar, the post was deleted in under a minute, but its the undeniable truth.

Maybe not, but I spent some time writing it, because I have been reading this forum since 2009, and I think moderators will be democratic.

Not sure why yours was deleted tho. :|

However I can tell you that I wrote that message in another forum, and it was deleted in 5 minutes and my nick was banned. But that was a forum from a Scam Broker with lots of Scam Complaints.

However, in most forums, every time I have to answer something like this, they don't delete it, because it's the truth. Nobody can really censor the truth.

I don't entirely agree about not being able to find an edge. You just have to think a bit differently, and there's one or two here at the zoo who have got it figured out.

You can find the edge short term, but in long term, the HOUSE always wins, like in Casinos or BlackJack, or Roulette, they all have an edge, and long term the House Always wins.

Yep, there might be a few guys with profitable accounts after 1 year of trading, but only 4 guys every 1000...

Also take in mind that many of the guys who represent the 0.4% are people with inside information or people who work in financial companies like GoldmanSachs, PIMCO, MorganStanley, etc...

 

[duderex]

They are greed over the profit and they are treating Forex as a gambling machine. That's why traders lose money.

 

[resistance]

They are greed over the profit and they are treating Forex as a gambling machine. That's why traders lose money.

The reason of this thinking is the poor guidance given to them before they come to forex market. If they know the reality they should learn the basics and must not invest big for trading.

 

[Jason Rogers]

The reason of this thinking is the poor guidance given to them before they come to forex market. If they know the reality they should learn the basics and must not invest big for trading.

Resistance, you make a great point here. Trading is a profession just like any other. Too many people underestimate the education and preparation needed to succeed. The DailyFX research team analyzed trading data from thousands of live trading accounts and identified the common pitfalls that keep unsuccessful traders from being profitable. Number one on the list of losing traits is poor risk management. Unsuccessful traders often cut their profits early, but let their losers run. Being undercapitalized or overleveraged is another common theme with losing traders. The DailyFX profitability stats also covered some other factors that separated the winners from the losers but those were two of the biggest.

 

[pboyles]

One reason that forex traders lose money is that their brokers defraud them using asymmetrical slippage practices and other dishonest means. Of course they also lose money due to their own greed and stupidity.

 

[robertofx]

Hello Traders,

Major reasons according to my experience are,

* Don't have a correct mind set
* No trading plan
* No idea about risk
* Revenge Trading
* Greed and fear
* Exit early and let the losers run

If you have any additional factors feel free to add

 

[kimo'sabby]

It is commonly known that most forex traders fail. In fact, it iss estimated that 96 percent of forex traders lose money and end up quitting. so I want to ask that what reason behind it? Please share your experience about it.

You give me a reason why most should be successful?