Trading on the Forex currency market, with the right approach, can enrich any trader, in terms of money turnover, it is the largest market in the world. However, more than 90% of all those who try to make money on the movement of currency prices end up losing everything. Only a small part of the players in this market make a profit. There are many reasons why people lose their money, some of them are psychological, others are purely technical.
One of the main reasons for losing all funds in Forex is that newbie traders are trying to make money by starting a trade with little start-up capital. A large number of brokerage houses offer trading with huge leverage, for example, 100: 1. Thus, having only $ 100 on his account, a trader can operate with amounts up to $ 10,000. These trading conditions have led to the emergence of micro-accounts, the amount of personal funds on which can be limited to a few cents. Such trading leads to the fact that the trader is forced to open large positions relative to the size of the account. The gain in case of correct forecasting will be relatively large, but the losses in case of errors in the market analysis will be very significant.
Greed and indecision when making decisions have a detrimental effect on the state of the account. Many traders with open positions believe that they can get more if they wait for the maximum rise or minimum fall in prices and thus get the most out of the market. However, the price movement cannot be predicted exactly, it is necessary to clearly set goals and adhere to them during the entire trade. Chasing a lost trend or changing decisions after opening a position also does not lead to anything good. Some traders, having opened a position, believe that they have made a wrong conclusion about the direction of movement and hastily close it in order to open in the opposite direction. Such trading leads to numerous losses, which almost always ends in a complete loss of money.
Trading without using stop orders is a very common cause of losses, especially among beginners. Not knowing how to admit your mistakes and close losing positions in time leads to quite large losses. Moving stop orders to the losing side can be considered an even bigger mistake. An attempt to wait out the unfavorable development of events, while having an open position, is a direct path to a quick loss, in this case, you can lose money after the very first transaction.
