Why Do Most Forex Traders Face Losses?

Forex traders are tend to face losses and this is not a new discovery for anyone. Traders are smart, self-confident, they have enough knowledge on the market but sometimes something goes wrong and causes them to lose their money. So what is that?

The answer is EMOTIONS!

Emotions are the inseparable part of human nature and they play a vital role in any decision that a person makes and it doesn’t matter whether these decisions are connected with personal or professional life.

In trading as well, emotions have a great impact on further steps and decisions of traders. Being able to keep emotions under control is not an easy task and it requires a lot of time of practice and effort.

The two main and the most “popular” emotions that have a negative influence on trading are fear and of course greed. I am pretty sure you all remember the old and famous Wall Street saying: “financial markets are driven by two powerful emotions – greed and fear”. These emotions make traders to deviate from their trading strategies and lose their trading self-control which can really be fatal.

Greed makes traders to over-trade and risk more than they can actually afford themselves and this in its turn leads to failure.

Fear is just the opposite of greed. It doesn’t allow traders to risk and take opportunities. It does not give traders the chance of trading properly and freely.

Actually, in order to be capable to control emotions one will need to develop discipline and a good trading strategy. A well-planned and well-developed discipline will help traders to think as objectively as possible. A trading strategy in its turn will help traders to realize when to enter and quit the market, how much money they can afford themselves to trade and of course to lose..:)))

To my mind, trading on demo accounts can be a great help for any trader, because demo accounts help to get acquainted with the problems, difficulties and awkward situations traders can come across while trading on real accounts.

Everything depends on a person and if you have made up your mind to take up trading or anything else then do not let your emotions interfere you. Be confident and believe in yourself.