It is the account market that is invested by the trader’s profit

It is the account market that is invested by the trader's profit

The main reason for the failure of foreign exchange traders. Online Teaching Part 1 Email me if you have any questions.
If in the long run, the market can only rise or fall, then using the most basic risk/reward ratio, there should be at least a 51% winner, right? Oh no. This article discusses the idea that traders are their worst enemy and that human error is the root of most problems. In short, the main reason for foreign exchange traders' losses is not rocket science. These are the traders themselves. Financial transactions, including the foreign exchange market, require lengthy and detailed planning at multiple levels. Traders must first understand the fundamentals of the market and constantly analyze the changing market environment before they can start trading. For those who are interested in investing and trading, please read the following suggestions, you will learn how to avoid losses in foreign exchange trading.
Over-trading or over-trading is the most common reason for the failure of foreign exchange traders. Excessive trading may be caused by unrealistic high-profit targets, reliance on the market or insufficient capital. For now, we will skip unrealistic expectations, as this concept will be discussed later in this article. Most traders know that it takes money to get a return on investment. One of the greatest advantages of foreign exchange trading is the availability of highly leveraged accounts. This means that traders with limited initial funds can still make considerable gains (or even losses) by speculating on the prices of financial assets.
As long as a strong risk management strategy is established, it is almost irrelevant whether to obtain a large investment base through high leverage or high initial investment. The focus here is to ensure the adequacy of the investment base. Having sufficient funds in the trading account will greatly increase the traders' chances of obtaining long-term profits, and also reduce the psychological pressure associated with trading.

As a result, traders risk taking a small share of the total investment in each transaction while still accumulating reasonable profits. So how much capital is enough? The important thing here is to learn how to stop losing money in foreign exchange transactions due to incorrect account management. The minimum foreign exchange trading volume that any broker can provide is 0.2 lots. This is Crouch also called a micro lot, which is equivalent to 102 basic currency units for trading. Of course, small trading volume is not the only way to limit risk. Both beginners and experienced traders need to carefully consider the position of the stop loss. Generally, the risk of each transaction of a novice trader shall not exceed 1% of his capital. For novice traders, using more capital for trading will increase the chance of major losses. Trade addiction is another reason why foreign exchange traders tend to lose money. They are doing something institutional traders have never done: chasing prices. Forex trading can be exciting. Under the influence of short trading intervals and unstable currency pairs, the market can move quickly and trigger a surge in adrenaline. If the market develops in an unforeseen direction, this will also cause tremendous pressure. In order to avoid this situation, if there is a problem, traders must enter the market with a clear exit strategy. Price chasing is actually opening and closing trades without a plan, as opposed to this method, which can be more accurately described as gambling rather than trading. As some traders do not want to believe, they have no control or influence on the market at all. In some cases, there are restrictions on how much you can withdraw from the market. When these situations arise, savvy traders will realize that certain steps are not worth taking, and the risks associated with a particular transaction are too high. This is the time during the day to exit the transaction and keep the account balance unchanged. Tomorrow the market will still exist, and new trading opportunities may appear.
The sooner a trader starts to see patience as an advantage rather than a disadvantage, the closer he gets to achieving a higher percentage of winning trades. Paradoxically, refusal to enter the market can sometimes be the best way to profit as a foreign exchange dealer. Trading in the financial market, especially in the foreign exchange market, involves a variety of risks, including financial risks, and may not be suitable for everyone. The information, news, analysis, forecasts and any other materials provided on the resource: /, /, /, channel, are for reference only and only represent the author's personal opinion, not recommended or should be regarded as investment, purchase, sale of assets or Offers and/or suggestions for other acts.
The trading ideas and investment results in the past period of time displayed on the website cannot guarantee future investment returns. How to make money on the Forex market?