Trading is a popular pastime.
However, if you are having difficulties with it, there are key things you can do to improve your chances of success.
If you want to learn how to trade successfully and minimize your losses, keep reading.
In this article we will discuss six reasons why you might be struggling in trading and provide practical solutions for each problem so that you can overcome them.
Over trading is the most common reason why you keep failing in forex, you could be trading to big or to often.
There are all sorts of reasons for your losses, including poor money management, bad timing, or a poor strategy.
Most traders will lose regardless of what methods they employ.
People think forex is a quick rich scheme but it isnt!
The only way to be successful and have sucess in the Forex market is to develop patience and consistency.
Taking smaller trades everyday over a longer period is the key to better trading.
You have to remember in trading you will take losses, everybody does, you have to learn to get back up and carry on, even the best traders take losses.
You have to think long term not short term.
Trading is a rollercoaster of emotions and can be addictive like anything, with many highs and lows.
Finally, one of the main aspects why you keep losing in forex is because you need a clear exit strategy if things are not going your way.
Overtrading is the excessive buying or selling the trading market , also known as churning. In other words, having too many open positions or using to large/ small amount of money on a single trade.
There are no laws or regulations against overtrading for individual traders, but it can be damaging to your trading account.
Undertrading typically means there is little or no trading activity even when there are opportunities to trade.
The biggest cause of undertrading is the fear of losing that trade and losing money. But, if you don’t trade, you could miss out on making profit and building your confidence and account to trade.
Overtrading is caused when a trader doesn't stick to the trading plan and increases to much money on a trade which can lead to poor results.
Over trading is also caused by emotion such as ;
Excitement- traders can be tempted to take trades without reason when the markets are moving quickly.
Greed-when traders are winning trades and making profit, they want to make even more money.
Fear- some traders will overtrade to make up for their losses and try to win back the money they have lossed.
If you want to find the best way to avoid overtrading then why not check out this trading article that I previously wrote by clicking here.
Having poor risk management, and even worse, no risk management is a major reason why forex traders lose their money quickly.
Risk management is key to being successful in forex trading. You can be a good trader and still be wiped out by poor risk management.
Over-trading is one of the most common things in forex trading preventing you from making money.
Never risk more than 2% of your available funds on an individual trade. Doing so puts you at significate risk of loss.
If you have a good forex strategy, then there is no need to risk alot on one trade.
When your trading account increases then you can increase your risk on a trade.
Do not let your emotions get in the way when trading!
If you would like to learn how you can grow your trading account without blowing your account with the use of risk management.
Then take action now by signing up to the Forex Masterclass clicking here.
How many times have you had a winning streak of trades then lost alot of money on a trade because you risked to much on one trade.
Then how many times did you change your strategy because you didn't think it was working anymore.
These are very common problems most traders face and assume it's there strategy that is'nt working which can have big consequences.
But if you give it time using your strategy and dont give up.
And traders stick to their strategies just a little longer and not give up so quickly during times of difficulty, we’d probably see a lot more profitable traders.
During your winning streaks it is important to stick to your strategy and not get over confident.
Always stick to your rules and the same goes for losing trades, dont try to make up for losses with bigger risk to reward. And don't make any changes to your strategy.
New forex traders will trade the smaller time frame, like the 1 minute or 5 minute charts. Then will get fustrated because it doesn't fit their strategy.
For some traders they feel comfortable trading the 1 hour charts. This time frame is a little longer, but not to long and trade signals are fewer but not to few.
Trading on this time frame helps give more time to analyze the market and not feel so rushed.
The 15-minute chart gives enough time (but not too much) to make decisions based on your trading plan.
You have to trade the time frames that are suited to you and your trading plan.
Starting with a demo account can help you decide the different time frames to trade, which are best suited for you.
Without the stress and pressure of losing your real money.
Trading is easy to get into, you can just open an account and away you go. But new traders lack knowledge to succeed.
Another critical part of trading, is you need a strategy because if not you will lose money.
Good preparation is key.
Traders can have the best strategy in the world that is massively profitable, but without the correct preparation, it will set the trader up to lose in the long run.
You need the right mindset to become a good profitable trader.
If you let your emotions get in the way of your trading, then your setting yourself up to fail.
Before you even think about trading, try and gain as much knowledge as you can about the markets you are trading and any factors that may impact you.
Knowledge is power!
Backtesting is also good... so you can test your trading plan over hundreds of trades to see if your trading strategy is consistantly profitable.
To wrap this article up!
Remember the main reasons what can cause you to keep losing in the forex markets, are from not having patience or consistency in your trading.
Overtrading is another big reason that will cause big losses, which can be damaging to your trading account balance.
Remember to never risk more than 2% per trade and never, ever risk more than you can afford to lose.
The use of correct time frames in your trading can be a deal breaker, when it comes to generating a profit at the end of a week, month or even a year!
...the best way to stop losing in trading is to make sure you have the right education and knowledge to succeed.
One of the top ways to get the right education is to work with a mentor to teach you the corect way to read and trade the markets.
With the Forex Masterclass trading course, as Jonathan as your mentor.
He will teach you the right education you need to succeed, whether it's with his flagship trading course called the Forex Masterclass.
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