Top 6 Reasons Why 90% of Traders Fails in Forex Trading

Numbers from different sources might vary, but at the end of the day, the truth stands that off the several traders who start Forex trading, only a few make it out successful! From the other side of the glass, things are seen differently. People perceive currency exchange as a field that is incredibly rewarding, easy to start off with and one where thriving comes effortlessly. While Forex is undoubtedly a lucrative, undemanding and a sustainable venture, it is risky all the same.
 

It is often the small mistakes that cause big repercussions. 

Here are the 6 core reasons you see large losses in your trades:
 

Ultimate Reasons for Forex Traders Failures

1) Implementing a Poor Strategy: The importance of a good trading strategy is insurmountable in Forex trading markets. What traders fail to realize is every move they make has to be pre-planned and drafted into the strategy they implement. The first way you lose money is when you employ a poor plan in your exchanges. Not only does this fail its main purpose of reeling in profits, but it also does the opposite and drowns you in losses!

2) Lack of Loss-Management Measures: The inevitable truth is that losses can't be avoided! So the next best move is to employ measures to contain and minimize them. With something as simple as a stop-loss, you can curb the impact caused by much of the risky moves made. Traders, however, find adventure in treading into the chaotic grounds of Forex trading in Vietnam without these safety measures! A stop order is meant to stop losses and take you out of bad trades; without this in place, thriving in Forex markets is impossible! 

Always have stop-losses employed, be it a small trade or a big one and irrespective of the potential risks.
 

Foreign exchange is tricky in that one minute your trade will seem fine, and the next minute everything goes lopsided! Don't get caught in this tricky mess; employ stop orders.
 

3) Not Adhering To A Healthy Risk-Reward Ratio: Veterans, professionals and even experienced Forex brokers in Vietnam claim that no more than 2% of your trading capital should be risked. The irony of Forex exists in the fact that bigger profits are usually a result of bigger risks. However, getting carried away and crossing the line leads to risking beyond necessity and losing a lot of money. To be on the safer side, obey the traditional risk-reward ratio of 2-3%. 

Crossing this might seem tempting like money always is, but it will cost you a good deal once on the other side of the line!
 

4) Over-leveraging: Leverage is a provision given by your Forex broker so you can hold higher positions and potentially make a good winning. Remember to always bite of what you can chew. Driven by the mad hunger to make money, traders end up leveraging high positions. While the fact is that a high leverage can bring high profits, it can take from you the same it promises to give. When you lose a trade that has been leveraged, you will lose the borrowed money and the investments you put! 

This will add up to a colossal sum, one which you don't want to owe back. Leverage in healthy amounts and keep away from vile temptations.
 

5) Letting Greed Get the Better of You: Greed will be your constant enemy for as long as participating in Forex trading in Vietnam. Confidence resides on the right shoulder of yours, and greed resides on the left! Money is undoubtedly a necessity, and a window to make more money is quite often impossible to resist. This is why it is suggested that you let greed empower you to trade better! Typically, a greedy trade would blindly chase money and hold losing trades. 

A greedy trader, who is also smart, will pick the most profitable of positions and make the most out of each; know the difference!
 

6) Trading to Make Up For Losses: Let lost trades remain in the past. A common mistake several traders make is trading to make up for lost money! Crying over spilt milk will do you no good. While losses are a devastating happening, letting them lurk around is a foolish thing to do. Instead, be motivated by them and see how you can avoid them and simultaneously improve the profits you make! 
 

Mistakes are natural and evolving from them is the wisest thing to do as a Forex trader. Having the assistance of currency trading veterans will not just help you avoid these mistakes, but will also help evolve as a trader! Sign up with the global leader WesternFX today, and join the league of professionals! We will empower your trades with top-notch trading strategies and provide you with the most stellar platforms to work on; call us today and let's get started with Forex trading in Vietnam!