As a forex trader or someone who like to learn to trade forex, you may have already read and heard that more than 95% of those who start trying forex, just lose money and then give up and only 5% succeed to become a profitable forex trader. This is a shocking and disappointing news, specially for those who like to become a forex trader. However, if you know why 95% of forex trading learners fail and give up, you can be among the 5% of the learners who become good traders.
1. Forex is different from all other businesses that you know!
Most people think that forex is like all other businesses they have already tried. Hard-working is the base and foundation of success in any kind of business. For example, a baker who starts working from 4am to 8pm everyday, makes more money that a baker who works from 8am to 4pm, five days per week. People start learning and trading forex with having such a background in their minds. They sit at the computer for several hours everyday. They check several different currency pairs and time frames. They do not want to lose any trading opportunities. They work hard and over-trade and finally they lose a lot of money and give up. Why? Because unlike all other businesses, in forex trading, it is the forex market that has to give you a trading opportunity. You can not create opportunities. If you try to trade when there is no trading opportunity in the market, you lose. And when you sit at the computer for several hours everyday while there is no trade setup, you get bored, you lose your patience and then you force yourself to take a position anyway.
If you like to become a good and profitable forex trader, the first rule is forex is a different animal! It is correct that forex trading is a home based business and in home based businesses, usually you are your own boss. But in forex trading, it is the forex market which is you boss. You can not force it to give you any money. Forex market should give you some money. You just need to be there to take the advantage of opportunities.
2. Lack of knowledge and experience
Most people start trading forex while they do not have enough knowledge about it. They just hear from some friends that forex makes money. Then they open an account and start trading based on rumors and useless news or rules that they just hear from the others. The lose all the money they have in their accounts in a very short time.
If you like to become a forex trader, you should learn it first. To learn forex, you do not have to sign up for expensive training courses or buy expensive DVDs and books. You can learn it for free. There is enough free information about forex over the internet.
3. Too much knowledge
Sometimes having too much knowledge not only doesn't help, but can make problems. When you know too much about forex trading, your overloaded knowledge does not let you decide properly. Whenever you see a trading opportunity, some part of your knowledge encourages you to trade and some other part of it warn you to stay away. Therefore, you always lose good opportunities and take poor opportunities and so you lose money.
4. Greed
You may think that you are not greedy but try forex trading and you will see how greedy you are. Everybody is greedy when it is the matter of trading and specially forex trading. Greed has to be controlled. Greed causes you to lose your profit with this hope that you make more profit. It pushes you to over-trade and over-trading has only one result: losing!
5. Fear
If you have fear in taking the positions, you should look for the reason. You have fear, probably because you are taking too much risk. You are trading with money that you will be in trouble if you lose it.
Forex can not be the main source of income for beginners. You should have a supplementary income while you learn forex trading. When you have no other income, and you try to make money through forex, you will have a lot of fear because you can not take any risk. You need every signal cent of the money that you trade and you can not risk any of it.
