The global marketplace for exchanging national currencies with one another, foreign exchange is the largest liquid market on the planet with trillion of collars changing every day. With the large scale of trading, the number of forex traders continues to increase every day. However, successful trades lie only in the hands of a few. Why does a large number of forex traders continue to fail?
Forex trading platforms in Malaysia can give you the resources to trade but it is important to understand why a large portion of forex traders fail to achieve their investment goals.
Mistakes and failure to analyze those can be grave to the process of trading. Today we will discuss some of the reasons why people consistently fail to achieve success with forex trading.
- Poor Money Management
Most tend to ignore the aspects of money management as they focus all of their energy on strategy development. While forex trading provides us with so much flexibility, the advantage of this is slept on with sloppy money management. Money management separates amateur traders from wealthy traders in their strategy. We can learn how to avoid poor money management by creating a set of concrete rules to avoid blowing an account. So now is the time to go back rethink your entire attitude towards the task of money management.
- Lack Of Strategic Plans
Trading without a plan is certainly not the road to success. Whoever convinced you otherwise, is most probably lying to you. Every wealthy trader out there understands the value of plans in avoiding many trading hazards. Take time out of your day to practice planning and testing the plan through trial and error.
- Lack of Trading Discipline
You may have heard this over and over, but stay disciplined. Staying disciplined sets you apart from the rest of the amateur traders. Disciplining yourself in the art of trading helps you minimize your losses even in the face of trial and error. Maybe you created your own set of rules for trading and money management, however, the lack of discipline prevents you from sticking to your own rules. Just like working out, how can you expect to see results if you vigorously don’t stick to the routine of working out? You cannot expect to beat the market with no hard work and disciplined effort.
- Lack Of Knowledge And Trial And Error
Knowledge comes from what we test and learn from. Knowledge also comes from the scattered books about trading. But knowledge never becomes old in the art of trading. The market is constantly changing and it is important to stay educated. We are certainly doomed for failure when we don’t test our knowledge and put it to trial. We are also set up for failure if we never learn from our trials and errors.
Next time when you see yourself failing or blowing an account, ask yourself these questions.
- Number one, do you have a trading plan?
- Number two, Do you have your own set of rules regarding risk management and money management?
- Number three, How disciplined and committed are you to learning?
- Lastly, number four, Have you backtested your trading plans, and does it work?
Keep learning from your own mistakes and research the habits of wealthy traders. Our best mentors are well-resourced, experienced traders. Knowledge and discipline are key to success in forex trading.
Liking our content? Click here to read more and enjoy!