6 Reasons You’re Not Making Money In Forex Market
YOU’RE TRADING WITH TOO SMALL OF AN ACCOUNT
We generally find that most newbies start trading live with too little funds. It’s extremely hard to even have a chance at profiting if a newbie is trading with a very small amount. Anything below $500 is really risky and pointless as per our experience because you will have to risk so little per order that you won’t really be properly vested in your trading and even if you get a chance to win a trade, you won’t make that much to positively reinforce good trading habits. Most of the traders fund their account with $100 and every time they blow it out. Have patients, save your earnings until you have at least $500 to $1,000 or more to fund your trading account with. In the meantime, you can practice on a demo account
YOU DON’T KNOW WHAT YOU’RE DOING
How can you expect to make money trading if you aren’t sure of what you’re doing in the market or don’t have any clue? Do you know what your investing/trading approach is for? Are you fully confident in it and in your ability to trade it and its effectiveness? If a trader is not sure of these things, the trader is never going to make dollars in trading. The correct way to be sure, you must know what you’re doing in the Forex market is by learning how to invest/trade appropriately.
YOU AREN’T DISCIPLINED ENOUGH
Basically, how can you possibly expect to earn money from trading if you are an undisciplined trader who cannot follow a trading plan or trading strategy? A good trader needs to be disciplined in following his/her trading strategy and also in sticking to proper risk management. If you don’t do both of those things, you will never earn money trading.
YOU AREN’T PATIENT ENOUGH
The market doesn’t work the way you or I wish it should, it works the way it wants regardless of your trades. So, we have to have the PATIENCE to only trade the market when it’s giving us the low hanging fruit trades that are ripe for the picking, and it takes a lot of patience to wait for them. If you are not patient you’d want things to come fast to you without putting efforts for it. You will want things to happen without waiting for it and that will make you unstable. Being patient with ourselves is what enables us to bounce back from a bad situation.
YOU AREN’T PLACING STOP LOSSES PROPERLY
Let’s say you want to trade 4 lots because that will allow me to make $4,000 on this trade, so you will obviously think like this, “I should use a 50 pips stop-loss” Here you are fixing your stop loss based on greed and you will most probably lose $2,000 rather than making $4,000. No Investor/trader is immune to losses in the market and independent of the trading strategy you use or how perfect you are, your strategy can still go wrong. Good traders, of course, have fruitful strategies which give them profits, but they also cut their losses short when the trade goes against them So what stop-loss one should set? Although the stop/loss criteria can differ from trader to trader based on their risk tolerance, it is generally a good idea to put a 10-12% stop loss if you are a short-term or long-term trader (i.e. you sell if the stock falls 10-12% below your buying price, and buy back if you are short and the stock rises 10-12%) .
YOU’RE NOT AWARE FOREX MARKET MOVES FOR VARIOUS REASONS, FROM FUNDAMENTAL TO TECHNICAL
The fundamental analysis enables us to find out good stocks which are good for investment and fundamentally strong. However, the fundamental analysis does not tell us when to invest in that stock. It is the technical analysis which will tell you when to invest in stocks and when to exit from that stock. Technical analysis is more useful from a short term duration. On the other hand, fundamental analysis is more useful for long term trades and investments. Fundamental analysis is the analysis related to the underlying forces that have an effect on the well-being of the economy, industry groups, and companies. Whereas technical Analysis helps you to identify entry and exit point, trend, Therefore, it is advisable to use both the analysis in the Forex market.
Note: All information provided in the article is for education purposes only. Opinions & view expressed in the article are not of the company and don’t affect any position or official policy of any organization, agency. They don’t constitute any professional advice or service.