Why Does Forex Trader Fail?
“Failure is a man who has not learned from his blunders. If you are able to cash in on that experience you are on the path to success”
It is a sad fact that 90% of traders fail, and many very quickly give up. Why? When I went through a phase of losing trades I treated it as a temporary setback and went back to the drawing board. I analyzed the reasons for my failure and I sought the guidance of Top Traders, Mentors, and Coaches to put me back on the path of success and profitability.
In my opinion, the high rate of failure for a new trader can be related to the six major obstacles that a trader faces, which are summarised as follows
1. Poor Skills
2. Lack of adequate capita
3. Setting unrealistic targets and goals
4. Lack of Patience
5. Lack of discipline
6. High-risk aversion.
If we look at the list, it becomes apparent that the failure is as a result of trading without having in place a proper Trading System and a Trading Plan– One that includes mind training, quality Forex education, and strategies and sound money management rules.
So what are the Characteristics of a Successful Trader? All we have to do is to reframe the liabilities listed above;
1. Adequate trading knowledge and understanding. You should seek services of good quality mentors and a trading coach
2. Adequate capitalization – Don’t be fooled that you can earn thousands every week from a starting capital of $500
3. Realistic Goals – don’t expect a 100% profit each month, it simply is not possible.
4. Have patience – don’t trade if you don’t have to. You should wait for a set-up according to your trading plan and system.
5. Have the Discipline to follow your rules
6. Understanding and Managing Risk
7. And lastly the most important is having a Trading System and a Trading Plan. Virtually 90% of Traders that I have coached have never had one!
If you look at the advice from the world’s most successful people or traders today, you will notice that they follow the guidelines as identified above.