If you've been trading long enough, you've probably heard the statement that "90% of traders fail." It is difficult to prove that this is so. However, this point of view is generally accepted by the majority of market participants. Below are a few thoughts on why traders struggle in the trading process and what can be done to join the elite group of profitable traders.
In this article, we will pay more attention to intangible things, since the lack of a plan, non-compliance with the plan, or insufficient preparation is already very often the subject of consideration.
What causes a trader to fail?
Too much focus on the technical side of trading rather than the psychological side
The success of trading depends more on psychology than on technical skills. You've probably heard of the 80/20 rule. In this context, it also applies: 80% of trading is psychology, and only 20% is technique. If trading was just about memorizing certain chart patterns and learning some fancy indicators, then more than 10% of those who attempt it would likely be successful. Memorizing formulas may help in the exam at the university, but not in increasingwhen working on financial markets where emotions are present in every decision we make. That is why having a very stable psyche is an absolutely essential factor. Everyone can, with some effort, learn what a head and shoulders formation or the MACD indicator is, but only a few manage to develop the mindset necessary for success in this game.
Having unrealistic expectations
This is a very common situation. Many novice traders come into this game believing that it will be easy and that they will be able to get rich quick. If you've managed to survive your first year or more in the market, then you probably know that trading is by no means an easy task and that it takes a lot of blood, sweat and tears to climb to the top. If you think that trading is an easy and quick way to get rich, then you are setting yourself up for serious disappointment.
Selfishness and stubbornness
It is not easy for any person to admit that he was wrong about something. We have a built-in defense mechanism that works when we get into a compromising situation. This is expressed in the fact that we begin to look for excuses or shift our guilt to other people or external factors. If you have this habit, be prepared to radically rethink your approach to such situations, because if you fail to do so, your trading career will be very short. Traders often have to decide in a split second to lock in a loss in order to prevent it from growing to a catastrophic amount. To do this, you need to be able to put aside your ego and suppress pride, and most people have big problems with this.
What do you need to do to be successful in trading?
Keeping a trade log
If you are already doing this, great! You are either already a successful trader, or you are on your way to this goal. Start journaling right now and you will be surprised to see the results. You will definitely ask yourself why you didn't do it sooner. Keeping a daily trading journal is essential to identify patterns - positive and negative - in your trading. This will help you clearly see what works and what doesn't. It will also help you get rid of a lot of unnecessary habits, which will save you a lot of money.
Keep a regular record of your profits and losses, accompanying the entries with notes about why you succeeded or failed to earn that day. You can add a number of other indicators, such as the average size the movement caught in a profitable trade and the average loss. This will help you determine if you are closing profitable trades too early and letting losses run out of control. In general, the importance of journaling cannot be overestimated.
Developing positive trading habits
As mentioned above, the psychological aspect of trading is much more important than the technical one. Therefore, you should focus on developing those intangible assets that will help you on this journey to the top. As you know, a trader must have the following psychological skills (but not only them): strong discipline, openness to innovation, systematic and decisiveness. The best way develop these skills in yourself - try to do it in Everyday life apart from trade. This is quite real - you can improve your trading even when you are not trading, but doing completely different things.
Are you the type of person who promises to go on a diet and then resists the temptation to eat a piece of cake with a chocolate shake, or are you able to stick to a plan and do whatever it takes to reach your goal? Do you know how to take responsibility and plan what you will do with friends, or do you just give the initiative to others? Are you ready to try something new the National dish, even if it has a very funny name and does not look appetizing?
The essence of these questions boils down to the fact that if you are disciplined, receptive to innovation, systematic and decisive in real life chances are that you will bring that same mindset into trading and gain a huge advantage over people who don't have all of these qualities.
Maintain a balance between trading and other activities in your life
This point is related to the previous one. Many traders devote all evenings and weekends only to activities related to trading. It's fine. If you are new to the market and are doing your best to, of course, this needs to be done. But in the long run, to develop the right mindset as a trader, you need to try to achieve balance in life by doing the things that make us happy. This, in turn, will allow you to show positive thinking when you are in front of the monitor screen in anticipation of profitable trades.
Balance and harmony are important always and everywhere. For example, in biology, this is homeostasis, the optimal state of the body; in the economy - sustainability. It is clear that we should not deviate from what is natural. For example, you can analyze the market and search for new securities within a few minutes after the close of the trading session, and then completely distract yourself from trading: exercise, go for a walk in the fresh air, spend time with friends or indulge in your favorite hobby. On weekends, dedicate only Sunday evening to preparing for the next trading week. By devoting time to activities that stimulate and refresh your mind, make you happy, and fill your life with joy, you will be able to maintain a healthy and positive mindset to bring it into trading on Monday.
We hope that these tips will help you understand what you need to work on in order to successfully move along the path of becoming a profitable trader.
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How to Succeed in the Forex Market? An exclusive Forexone blog article about 20 tips for a novice trader to succeed and make money on the currency exchange.
Has caused losses for a very large number of inexperienced and undisciplined traders over the past few years. That is why you want to understand how to succeed in the Forex market, so as not to become one of the 95% losers who lose their own money.
Risky and dangerous trading includes gold trading (XAU). ? This question is asked by many novice traders, but gold is a difficult tool to trade. We do not recommend that you trade gold on the currency exchange if you have little experience in trading. And now let's move on to the most important tips for a novice trader.
We will look at trading tips on how to succeed in Forex that will help you avoid trading disasters and maximize your potential in the currency trading market:
- Explore yourself and your capabilities.
Carefully calculate your risk tolerance according to your needs in the market. Simply put, you must identify your risks and opportunities. This is what your risk management in trading will consist of. - Write a detailed plan of your goals and don't back down not one step away from your plan.
You must become a disciplined trader. Only through discipline in trading can you be successful in the long run. - Choose the broker you work with wisely.
The selected broker should fully suit your wishes and your trading style. If you want to practice scalping, look for brokers that have low commissions. - Choose your account type and leverage rate
Account type and leverage must fully meet your requirements and expectations. Don't forget about money management. - Start trading with small amounts and gradually increase the amount of money on your account in proportion to your profits.
If you can't grow your account with income, then there's no point in constantly pouring funds into your account just to waste money. Of course, at the initial stage, this is an integral part of beginner trading. But if you need to replenish your trading account for the 5th time in a row, you should think about the expediency of playing on the stock exchange. - Focus on one pair of currencies.
Increase the number of currency pairs as you improve your trading skills. Without this condition, you will not be able to earn money. Learn to trade at least one specific currency pair. - You must understand every action you take.
Every trading and analytical decision you make should be informed and rational, not made on the basis of emotions and impulses. You need to analyze each completed transaction. - Do not increase the size of a losing position.
A common mistake of beginners is to unreasonably “top up” a losing position. Averaging or martingale are slippery trading strategies with a high probability of risk and are extremely contraindicated for novice players on the stock exchange with a small deposit. - Tie down your emotions– they will not help you while trading in the Forex market.
Emotions do not just negatively affect any one trade, they destroy the entire trading system. We are all people, but when you open a trading terminal, you must strictly follow your trading algorithm, regardless of what happens in the market and with your open position in particular. - You need to keep records to study your successes and failures, which will help you constantly improve your trading system.
Without a trader's diary, you won't be able to evaluate your trading and find mistakes. You must document each of your closed trades. The trader's journal is the archive of your trading history, without which you will have no future. - Automate your trading in the currency market as far as possible.
Having found the regularity of the currency market on which you earn, you must algorithmize or automate this trading system. This will bring you more money than manual trading. - Do not rely on Forex robots, miracle methods and other useless ways.
Even having found a pattern on the chart, you should not completely rely on advisors and robots. There is no single universal scheme for how to succeed in stock trading. The market is volatile and the pattern that you brought to automation may stop working the very next day. - Keep your trading plan and analysis simple in understanding and explanation, and then it will be much more useful.
Don't complicate your trading. In fact, everything is not as difficult as it seems to many beginners. Yes, you need trading experience to understand this, but this does not mean that your trading system should be extremely difficult at the beginning of your trader's journey. - Don't Go Against the Markets unless you have the patience and financial fortitude to stick with the long term plan.
The biggest money is earned by large traders when the price movement vector changes. But you are not a big trader. Never try to go against the trend - you will not have enough ability to determine these changes in advance, nor your trading deposit, to stand firmly in a position when everyone is making money on a trend move. - Forex is based on probabilities, which provide you with a variety of profit opportunities.
Remember: no one can predict the price movement in the future. Nobody! You will always be only 50% right. Your task is to find logical reasons for where the quote should move in the future. - Be meek and patient. Don't fight the markets.
Learn to work in the direction of the market and you will be successful. Learn to identify the trend. It just sounds very simple, but in fact, only a small percentage of novice traders can determine the price direction vector. Why? Because the trend is not always the same on different timeframes. - Be realistic about your expectations.
Follow your own judgment. We recommend that you focus on an annual return of about 25% if you are a beginner. This means that if you made $125 out of $100 in a couple of days, be prepared for the fact that by the end of the month you will have $102 left. More than that - it will be a success, because you have not lost money! It may sound funny, because you did not come to Forex for the sake of $2, but believe me - this is a very important step for making big profits. - Master the basics of money management, which will help you effectively manage the funds from your account.
Without proper and prudent trading capital management, you will only be in the market for a few trades. You must be able to calculate the cost of the lot, determine the optimal leverage for yourself, which will not destroy your trading account instantly when the market goes against you. It is also necessary to include risk in your trading deposit. Your cash deposit with the broker should be sufficient for your trading strategy so that the maximum loss per trade is no more than 2%. This 2% should be your stop loss. This is your airbag. - Learn Forex currency pairs, their fundamentals and various technical factors that affect price fluctuations.
Fundamental and technical analysis are 2 types of analysis that govern the entire Forex currency market. Fundamentalist traders prefer to follow economic news exclusively. Technical analysts use only indicators, advisors and chart patterns on currency quotes charts. We also recommend that you use A complex approach. It may not be as deep in each type of analysis, but in general it will give a more objective picture of the situation with a particular currency pair. - Do not give up!
95% of traders lose their trading deposit. This is a fact and we are directly telling you about it. Moreover, there is not a single very successful trader who has not lost several trading deposits. The foreign exchange market will harden every trader who wants to bite off his piece of the money pie. The difference is that successful traders are extremely stubborn.You should see not the reason for the defeat, but the opportunity for earning. Opportunity to become financially independent. Everyone has losses, but this is an occasion to learn useful lessons from them and improve your strategy. If you turned out to be wrong in the past, you always have the opportunity to correct yourself and this will not only strengthen you morally, but also bring money if you correctly analyzed your loss. Remember: your mistakes are your potential victories!
Forex trading is attractive because of the opportunity to get rich quick. Many of those who start their journey in trading experience losses in the first months of their activity. Some traders cannot make money even after several years of trading, as they study not the price behavior itself, but its display on technical analysis indicators. First of all, you need to know how the price behaves and how the market changes.
Choosing a broker
What is the market and how do people earn - this is the first thing that any novice trader should know. First of all, you need to open a trading account with one of the leading brokers, best of all - in or.
The choice of a broker is very important, because dishonest companies can profit from traders, while large and well-known ones make a profit due to the client's turnover. Recently, traders have begun to trust only large brokers, which make it possible to reduce non-trading risks to a minimum. Please note that it is the beginners who most often fall for the fraudulent schemes of some "kitchens" that promise guaranteed profitability, etc. There are no guarantees on the stock exchange and cannot be.
Success in Forex depends partly on the choice of trading conditions, account type and spread size. The smaller the spread, the better, but if someone claims that their company does not have it, then most likely he is deceiving you. In Forex there is always a 1-3pt spread on major currency pairs.
Creating a trading strategy
A trading strategy is created by all traders, after a few months of trading there are assumptions about the price movement in the future. Next, traders conduct an analysis, on the basis of which they look at what factors these changes occur in relation to.
The second stage is the search for significant price patterns and entry points for the trading strategy. At this stage, the trader looks at the history of price changes, the approximate percentage of potentially successful trades, and also calculates the average loss and average profit trades. The average winning trade should always be greater than the losing one, it is best if this ratio is 3 or more.
A trader can consider himself successful with stable weekly and monthly returns within a small range. Alpari encourages the profitability of the trader and pays, as a deposit rate, once a year funds to the client, depending on his activity, namely, the trading turnover.
Best forex brokers
Alpari is the undisputed leader in the forex market and today the best broker for traders from Russia and the CIS countries. The main advantage of the broker is reliability, confirmed by 17 years of work. Alpari gives traders the opportunity to earn and withdraw profits.
Roboforex is an international broker the highest level licensed by CySEC and IFCS. On the market since 2009. Provides a range of innovative tools and platforms for both traders and investors. It is famous for its excellent bonus program, which includes $30 free for beginners.
Psychological work on yourself
Psychology is the main reason for success and failure, both in real life and in Forex trading. Resilient people who are trying to achieve stability are willing to receive even 5-10% per month, so long as the account remains intact. Stability is the most important parameter of a trading account, unfortunately, this is rarely discussed.
To be successful in the Forex market, you have to put up with the possibility of losing or missing out on the market in your first year of trading. The main thing in trading is not to deviate from the goal, to choose only the best companies, such as or, then you can trade for your own pleasure and, as a result, earn.
Successful traders gain financial independence, significance in society and live only for their own pleasure, and all you need to start is opening a trading account, learning basic market concepts and trading methods. Traders can earn as much as 5% per month, with conservative trading, and 20-50%, with aggressive trading. Trading is not an easy task, but it is for the elite. If you get a fixed income at a hired job, then you can get much more money from Forex, exactly as much as you need or even more.
Sincerely, Alexander Ivanov
Few people have not thought about how good it would be to earn a lot, combining it with the opportunity to travel. Such a well-established pattern of behavior of a successful person, unfortunately, is practically unattainable for ordinary citizens of the CIS countries and the Russian Federation, who, for the most part, are tied to their main workplace and receive insufficiently large salaries in order to rest more than once a year, and even then ... To to fix this, many today are trying to succeed in the Forex market, which just offers to achieve the standard of living desired by many.
We will tell you about how to achieve the goal and what you should pay attention to along the way to it in the article below.
General description of the beginner's actions
Schematically, the algorithm of actions for everyone who decides to open an exotic profession of a currency trader for themselves consists in the following steps.
- Choosing the right Forex broker that pleases trading conditions, belongs to the category of reliable, can help with bonuses and so on.
- Opening a demo account is a mandatory step from which you begin your direct acquaintance with trading. In no case should you immediately start with a real account in order to prevent offensive mistakes due to ignorance, which will lead to serious financial losses.
- Finding and testing a suitable trading strategy.
Having completed these three points, the trader moves from the category of a beginner to the category of experienced speculators, where he will continue to improve his skills, search for new trading methods, and so on. At this stage, it is already important to learn not to lose money, gradually increasing your experience and deposit, which over time will allow you to get the status of a professional trader.
Finding a Good Trading System
Today, there are a huge number of trading systems in the network, and many of them, it must be admitted, are quite accurate. You should not think that since they are distributed for free, then you cannot earn money on them, but it is better to spend the n-th amount of money to buy some kind of Grail. In fact, to make money, a trading system that will give at least 60% accurate signals is enough, especially if it enters with a classic risk/reward ratio of at least 1:2.
Considering that the initial probability of this or that development of events in Forex is 50/50, then any normal TS is enough to earn. However, there is one caveat. Often, profits are prevented from accumulating by the trader himself, who interferes with the algorithm of the TS or does not fully comply with it.
Work on yourself
In addition to understanding the general algorithm of actions, discipline is extremely important. A good trader is a disciplined trader who resists the temptation to enter a trade if the entry conditions are almost met, does not get greedy by over-holding the position, and does not give in to fear when the price pulls back against him.
It is extremely important to 100% follow the rules of the chosen trading system, since only in this way can you effectively work on mistakes, draw the right conclusions and improve your trading daily.
Proper money management and risk control
Many people think that personal qualities and a good strategy are enough. In fact, yes, but with one caveat - if the trader understands and correctly uses risk management. Before you succeed in the Forex market, you must learn how to correctly assess risks and calculate money management so that the deposit can withstand a series of unsuccessful transactions without any consequences. That is, the recovery factor should be high enough to make it easy to catch up.
Without the ability to calculate the correct volume for entry, taking into account the size of the stop, the size of the deposit and other variables, the trader will never succeed, therefore, when testing the strategy, you should always pay great attention to the choice of working volume and not allow it to be thoughtlessly increased, especially after losses, when the psyche is unstable and one can easily succumb to tilt.
Having studied the above, it should be clear that to achieve success, no fancy actions are required, since the path to development in the Forex market is simple and clear. But at the same time, few can conquer the market and achieve their goal. First of all, this happens due to the fact that a trader is not an easy job, but also a lifestyle, a way of thinking and acting.
Most beginners come to the Forex market, tempted by colorful advertising. It offers the first profit today, it is enough to open a trading account with the right broker (for example, Forex4you has proven itself well).
The thought of 100% profitability will make even experienced businessmen dizzy, and it is even easier to seduce a novice trader. Unfortunately, reality rarely matches the promises of advertising. To become a successful trader, you need to show strength of character, make every effort and survive more than one defeat. Despite all the difficulties, newcomers continue to make their way into the world of financial independence with the help of the foreign exchange market. And everyone is tormented by the question of how to succeed in Forex?
Trading is not an exact science. It cannot be learned by reading a couple of textbooks on technical analysis. There are a lot of open access trading systems on the Web, but their effectiveness is doubtful. Before opening a terminal, a novice trader must understand that only his own view of the market and price movements can lead him to success.
You can start learning with textbooks on technical and fundamental analysis, and then try out several popular strategies in practice. Experiments are carried out on demo accounts. You can switch to real trading only after receiving a stable positive result on a demo account. Even if the trading system has started to make a profit, keep polishing it and looking for your mistakes.
Also on the Internet there are many courses and trainings, both paid and free, here are some of them:
Free
- Free webinar about trading in the stock market. Go
Paid
- Quick start on FOREX in 3 days! Go
- The foundation of profitable Forex trading. Go
- The naked truth about technical analysis. Go
- Online training “SUCCESSFUL TRADING”. Go
Limit losses per trade and trading day
The main reasons for large losses in trading lie in the inability to manage capital. Most often, traders suffer crushing losses in such cases:
- trading without a stop loss or its constant movement in the direction of increasing potential losses;
- making transactions after a series of losses under the influence of excitement;
- oversized lot.
Losses are as much an integral part of the trading process as profits. There is no perfect strategy where 100 trades out of 100 will bring profit. Losses must be approached from a philosophical point of view: accept and limit. A successful trader controls each transaction with special care, having previously determined for himself the maximum loss threshold for it and for the whole day. When this number is reached, trading should stop.
Maintain discipline in trading
The market loves analysis. It only at first glance seems that the movement of currencies is chaotic, and it is pointless to look for patterns. Each trading system has its own efficiency - the ratio between profitable and unprofitable transactions. If orders are more often closed with a positive result, and the stop loss is usually 2 times less than the take profit, such a strategy is characterized as a system with a positive mathematical expectation.
If a trader clearly follows each signal and does not open on the basis of intuition in the wrong place, by the end of a certain period he considers the planned profit. The resulting losses are generously compensated by transactions with a profit. Often a person makes adjustments to this process by opening orders without any reason. An undisciplined trader receives unplanned losses instead of potential profit.
Diversify Your Risks
A competent trader must be a good investor and skillfully manage his money. Unfortunately, nothing is permanent in the world. This also applies to brokers. Bankruptcy in this area is not uncommon. If a trader has concentrated all his capital in one company, one day he may lose it completely. Working with several brokers at the same time will help eliminate risks. In case of bankruptcy of one of them, the rest of the capital will not suffer, and the person will be able to continue trading in the financial markets.
Success on the Forex exchange is measured in the material wealth of the trader, the stability of cash receipts from activities and protection from force majeure situations. The foreign exchange market is difficult to tame, but if you show perseverance and determination, the obstacles can be overcome. Here's what you can do this week:
- read one thematic book about forex;
- get acquainted with the basic concepts and laws of technical analysis;
- choose a broker. Here, try to focus on companies where cent accounts are available (as an option, Forex4you is suitable);
- download the MetaTrader4 terminal and get acquainted with its functionality;
- choose one optimal one from the list of available strategies;
- test its capabilities on a demo account;
- open a real account and make your first trade.
Put discipline and training at the forefront, develop the necessary psychological qualities, and success will not keep you waiting!
P.S. By the way, the Forex4you website has a “Beginners” section, where all relevant information is available in a compressed form. Therefore, if you want to save time - peep there.
What do you think, what skills and personal qualities of character should a successful trader have in order to succeed in the Forex market? Share your opinion, and perhaps experience in the comments to this article.
Good luck and see you in the next article.
