5 Reasons Why Forex Traders Lose Money in the Market

Forex trades can swing two ways: either up or down, which should mean that there should be 50% winners and 50% failures in the market, right? Wrong! Despite what the 1:1 risk/reward logic dictates, there are over 90% of traders who end up losing their money in the market. So, how can traders make it to the proportion that actually makes money?

For starters, you might have to probe if you’re really into trading. Most people in India who start Forex trading, do so to get away from the drudgery of 9-to-5 jobs. But it’s not the sole conviction to make money that can guarantee success in the market. 

The first step is to identify the common mistakes that traders make and to avoid them when you venture into trading:

#1: Plunging into live trading directly

You might have it all: the knowledge, the confidence, the money and the passion for beginning trading right away. But what you don’t have is practice. Skipping out on demo trading or not spending enough time on it can leave you unprepared.

Solution:

Get a Forex demo trading account. It’s recommended that you sign up with a reputed Forex broker such as WesternFX that provides a demo account emulating the live scene.

#2: Not accepting losses

Remember, losses are a part of the game, and there’s nothing you can do to avoid that. Most traders fail to accept this fact and end up undergoing a dramatic swing of emotions when they lose. Some even end up taking rash decisions and jump right back into the market to recover money, but in the process, end up losing more.

Solution:

Accept losses. They are inevitable. Formulate a risk management plan and maintain a neutral mindset that will prevent you from giving in to emotions.

#3: Trading too much

The more you trade, the more money you make – that’s what a particular section of traders believe. However, this can lead to market addiction and unrealistic goals. The market is volatile, and chasing the price without a clear strategy is considered a gamble, that could result in losses.

Solution: 

While it seems paradoxical, it’s better to refuse to enter the Forex trading market sometimes to make profits than to trade all the time.

#4: Refusing to adapt

While it is necessary to have a clear plan, it is also necessary to be flexible. Refusing to adapt to market conditions and sticking to the same strategy can end up in losses.

Solution: 

Forex trading in India is prone to fluctuations based on trends. It is vital for Forex traders to distinguish between trending and ranging markets, and apply the right strategy accordingly.

#5: Trading without professional assistance

No matter how much you think you’ve mastered Forex trading, you still have a lot to learn. Not gathering insight from seasoned professionals will deprive you of valuable knowledge, which can, in turn, affect your chances of making money in the Forex exchange.

Solution:

Learn from professionals. Most online trading brokers in India provide excellent support, allowing traders to talk to experts and revamp their trading game.

Success in the Forex trading market isn’t an assurance. However, you can multiply your chances of making money by teaming up with a reputed Forex broker. WesternFX is a leading brokerage with a clientele base that spans across continents. Amplify your profits by opening a trading account now!

The Role of Confidence in Good Trading Psychology

When it comes to psychology in Forex trading, there would be three major parts to it – confidence, discipline, and consistency. The psychology that one adopts during trading is more important than other aspects of this field such as a good strategy and the ability to manage risk. The right mentality is the foundation for the other two. In this article, we’re going to be exploring the relationship between confidence and discipline in the trading sphere, and how the former is vital for establishing a good trading psychology. 

The importance of confidence

Being faithful to a particular strategy for a prolonged period would be impossible without having faith in the strategy. One may be able to muster the right focus and the right discipline for this, but a few unsuccessful traders are sure to displace one’s focus in his strategy. 

After a series of losses, any ordinary trader would be faced with the temptation to move away from his established strategy. This impulse derives from the need to avoid losses, and it would only intensify as losses pile up. Confidence in one’s system would slip every time a loss occurs, leading to a widening sense of anxiety and doubt. 

How to acquire confidence

The prime source behind one’s psychology would be their expectations and how reality responds to it. Anxiety and doubts set in when one’s expectations are not delivered. 

When one knows what to expect from the Forex exchange market in India in a more realistic light, the chances of losing faith would be minimal. As a result, the best-known way to establish confidence is to have a method to expect more accurate results when trading. You might ask yourself how this is possible. However, a person can adjust his expectation when trading with the help of analysis, charting methods and the help of system metrics. These figures give one a more measured and realistic view of the restrictions and probabilities of a market and how the outcome of a particular transaction might go over a period of time. 

The major advantage here is that one offsets the chances of raising high expectations and inviting more anxiety into his psychology as a result of it. The absence of low confidence, anxiety, and doubt are sure to bolster one’s presence of mind and add to his trading discipline.

WesternFX is among the leading brokerages in this region, offering online trading services to clients in India, Pakistan and many other countries. If you need more insight into the tenets of Forex trading, then get in touch with us. We have helped countless trading participants elevate their profits in this zone and we can help you too!