- PPF Points
- 2,039
Retail traders in the forex market often lose because they don’t realize how intricate and merciless it is, not because they don’t have the potential. Poor risk management is the main reason—a lot of traders put too much on a single transaction while at the same time under the impression that one big win will change everything for them, only when the market turns against them then the big bang theory becomes just that. The second reason is their tendency to emotionally chase the market by getting into trades too late or exiting too early out of fear or greed. And the third mistake comes from trusting their own indicators or strategies too much that they don’t even know and in addition, copying others without building their own system. The forex market is quick, emotional, and with lots of traps, and without a solid, tested plan and the discipline to stick to it, even a good setup can go wrong. Wasting time overtrading is also widespread since a great number of the retail traders think that they have to be in a trade all the time, believing that more trades mean more profit, from which they suffer more losses actually. Besides, a lack of education is a big factor too, because many of the newbies come to this market with the illusion that forex is fast money, mostly because of the flashy ads and social media hype but fail to take time to learn the basics, e.g. what events affect currency movements or how to properly read the price action. Too many wishes without planning and urging to use high leverage are the reason for their quick burnout. Only those traders who treat the market as a serious business and not as a way of quick money have a chance to succeed.
