As we get older you know more people that have tried trading in the financial markets and have failed. If you have just started trading or are sitting on the fence whether it is a good time to dive into the markets you would have heard that the failure rate is around 90% with forex traders dropping out within in the first few years.
With stats like that you might think what the hell is the point in even starting but then you see the results of some #Instagram millionaires, the fancy cars, luxury trips and you will either think its a big scam or you will be motivated to keep going, keep learning and keep grinding. It is true that the ones that do not quit are the ones that succeed. Those traders you are following are only showing you a tip of the iceberg, they do not show you the hours they put in to learn to the craft and the many failures and blown accounts. They do not share the hours of grind and heartache when shit goes wrong.
There are probably more than these 3 reasons why #forex traders fail however these 3 are the ones I have failed at most so I am going to use these as my examples. What you should take note of is that these common mistakes can be avoided with a good mindset.
Learning to trade is the easy part, following the strategies is even easier but if you are unable to apply these in the proper context, your skills alone will not generate the profit you have set out to achieve.
We can only trade what is shown on that given day/week in the market and the traders who regularly disregard what the market is telling them often end up crashing and burning.
Take some time to figure out if there’s additional information that carries more weight in terms of determining current price action instead of being stubborn and even adding to your position.
Spending hours in front of your computer or phone doing the proper due diligence on the markets can be boring as hell which is why most aspiring traders simply decide to give up and pursue something else entirely. They don’t have their goals truly printed in their minds
2. They set unrealistic expectations.
When I first started trading I had this impression in my mind that I would be a millionaire in 6 months. While I did have a lot of success, I had to adjust my expectations. If you are just starting out know that it will take a lot of time learning and many losses in the forex markets before you become a consistently profitable trader. There are many things that can be done to speed up the learning curve, but there is no way to completely eliminate it.
Don’t put too much pressure on yourself not to take a loss and if a trade doesn’t go your way do not think that you are a shit trader. You will experience losing streaks and undergo drawdowns which will probably make you feel like shit but it is all part of the learning process.
Whether you like it or not, you will be on the wrong side of a trade in some instances. But it’s okay. Even the best forex traders out there still experience these downfalls.
3. You would rather be right than making money.
Nobody likes to be wrong, period, it sucks balls I know. The faster you learn to swallow your pride and it the cock up behind you the quicker you will become a better forex trader.
Often traders become so fixated on their trades they don’t look at the bigger picture. They forget that even there strategy can go wrong at times and they get paralyzed when the trades do not go as planned. If your trade has broken a rule and has turned just close, take the loss and walk away to trade another day.
Successful forex traders know when they should exit a losing position and they are able to do so quickly. To be consistent in your trading you should always look to make good trades and accept the fact that you alone cannot control the results.
If you want to be successful in forex trading, listen to what the market is saying, have an open mind. Love what you are doing and have clear goals for your future. Set realistic goals and expectation with forex trading and be honest with yourself when it comes to making mistakes. By learning from the common sources of failure, we can know what to look for in our trading habits and know what to avoid. That way, before we even hit the wall of failure, we can already correct our behavior and mindset.