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The Main reason Why Forex Traders Fails.
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seravitae

Membre depuis Feb 08, 2011  5 messages Sebastian Petrik (seravitae) Mar 07 2012 at 07:30
You all need to see FXCM's statistical video. The main reason why forex traders fail has NOTHING to do with their strategies - all of FXCM's customer base, for the major pairs - successfully take profitable trades over 50% of the time. However they lose overall because they have poor SL/TP ratios.

The ACTUAL number one reason forex traders fail is because they use very poor or nonexistent money/risk management.

Don't be greedy..
ECMartin

Membre depuis Sep 08, 2010  46 messages Martin (ECMartin) Mar 07 2012 at 20:07
That's not the reason. OF COURSE they take profitable trades over 50% of the time IF they use poor SL/TP ratios, that's pure probability. Once they start using good SL/TP ratios with the same strategy, they will stop winning over 50% of the time.

A hard thing about business is minding your own.
fxsystemtrader

Membre depuis Jan 12, 2011  4 messages fxsystemtrader Mar 08 2012 at 12:10
Hi Sebastian

Thanks for the link. It is certainly interesting but I think there a great many reasons why traders fail and this is just one of them.

The SL/TP is definitely important but in my opinion just one of the factors that contributes to traders losing.

We are not 'genetically' well programmed for the 'game' of Forex trading which means that many of our 'responses' which we are conditioned with from an early age actually prompt us to make precisely the opposite decisions when we are faced with Forex trading.

This is huge area and one that is not remedied by using automated trading systems alone.

Think about it. There are only so many ways to trade with an MA for example, a limited amount of currency pairs and TP/SL combinations that can be created. Yet with the the vast amount of research carried out by traders and the constant stream of systems being released to the market all the time you would think that someone would have created a foolproof system by now?

Of course not. Forex trading is a moving target and the last thing that most traders look at when then fail is themselves. Its always the strategy or broker that is blamed... when most should blame themselves. :-)

alphasys

Membre depuis Feb 03, 2012  24 messages alphasys Mar 08 2012 at 22:26
I think that using sl/tp, money managment, etc, depends on emotions, the less you control yourself even when you win make you stepout when you dont have to, and also when you 'think' the market will turn to your way when we loose.
A good strategy is the one that keeps out our emotions.. just my thought :)

eating pips!
SCManagement

Membre depuis Mar 06, 2012  17 messages Smart Capital Management GmbH (SCManagement) Mar 09 2012 at 09:23
it is a combination: most of it is emotions, the majority of traders doesn't understand this. secondly, imho, it is the wrong broker, again the majority of traders doesn't understand how to chose the correct broker and probably a good portion of all brokers are bucket shops. so even if you were a good trader, you wouldn't stand a chance. my first live trading account (pure luck, but i didn't know then) went up from usd 2000 to usd 7500 within weeks. ok, good old times where we didn't have mini- and microlots. anyway, i did send a fund request for 4000 and all i got was a correction in my account. all profit trades were cancelled, all losers were valid. by the way: that was GCI.

money-management with a win-win
Pete23

Membre depuis Jun 15, 2011  1 messages Pete23 Mar 09 2012 at 13:17

   fxsystemtrader posted:
   Hi Sebastian

Thanks for the link. It is certainly interesting but I think there a great many reasons why traders fail and this is just one of them.

The SL/TP is definitely important but in my opinion just one of the factors that contributes to traders losing.

We are not 'genetically' well programmed for the 'game' of Forex trading which means that many of our 'responses' which we are conditioned with from an early age actually prompt us to make precisely the opposite decisions when we are faced with Forex trading.

This is huge area and one that is not remedied by using automated trading systems alone.

Think about it. There are only so many ways to trade with an MA for example, a limited amount of currency pairs and TP/SL combinations that can be created. Yet with the the vast amount of research carried out by traders and the constant stream of systems being released to the market all the time you would think that someone would have created a foolproof system by now?

Of course not. Forex trading is a moving target and the last thing that most traders look at when then fail is themselves. Its always the strategy or broker that is blamed... when most should blame themselves. :-)


I agree.
Very well summed up.
Long may peoples nature stay that way, so they can have fun betting and we can have fun making money.
P.

Freedom comes from the drudgery of numbers.
paulng

Membre depuis Aug 13, 2010  43 messages Paul Ng (paulng) Mar 10 2012 at 15:05
I'll have to agree with the good advise posted by the experienced traders. I must admit I have no idea where the market is going to go next, because I don't have the ability to look into the future. All I know is to react, manage my open positions, and control my risk.

For those that strangely believe they can forecast and place their over-leveraged bets with fond imagination, I'll love to win over their accounts. Hopefully this 2cents nugget adds on to the list of reasons traders fail.

"The first rule of forecasting should be that the unforeseen keeps making the future unforeseeable." - David McCasland (January 5,2012, Our Daily Bread)
ericwls

Membre depuis Mar 13, 2012  3 messages Eric W (ericwls) Mar 13 2012 at 22:16
Many good points. But the main problem is that they start trading spot FX, which is an instrument most do not understand and do not need. It is probably the worst place to start trading if you are new to capital markets.

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