Why do 95% of beginning traders lose their deposit?
The Internet statistics reports inexorably that 95% of beginning traders lose their deposit and leave the market. As for the beginning traders only, it is actually a very optimistic figure. If 5% of total number of the beginning traders would join the ranks of successful traders regularly, it will result in a giant army of the latter traders. In fact, more than 99% of traders leave the market at the initial stage.
The first reason for failure of the beginning Forex traders is that they expect to make money in a fast and an easy way inspired by online ads placed by Forex Brokers. This is how tempting their offers look like: account registration takes only 20 seconds, high leverage, personal account manager, minimum lot size, free trading platform, free demo account, free education … When you register your account, some manager will call you within a very short period of time and tell you a lot of things, especially with regard to how easily you can deposit your account and start trading. It is true for the most of dealing centers. Do you feel that you are ready for trading? If yes, then step in. After doing that, your money will go to your dealer. It is nonsense that it is the fault of your dealer, which just takes advantage of your ignorance and helps you to give your money off to him. It is your fault only. (Read more about Trading psychology)
You come into a large interbank business full of professional traders, which have been sharpening their own skills due to an ignorant and an undisciplined crowd of traders over many years. It is these 5% of major players who “eat up” money of the rest 95% of traders cheating them in a roughly manner. Generally speaking, nobody is interested in that you will become a successful trader, since you have already contributed a pretty penny to the common cause after becoming a trader. The second, third, fifth, tenth …. trader will take your place. When you become disappointed in the Forex market, you will call it a fraud scheme and never come back again. Another scenario: you will replenish your deposit again, lose it not so fast, but still call it a fraud scheme.
Education, education and education. Believe me that there are no two-week courses, which can prepare you for successful trading. Of course, you can complete a free training in using a trading platform and fundamentals of technical analysis. No problem. You must advance in knowledge on a “simple-to-complex” basis. You will be able to make sure what nonsense dealers teach their clients at beginner’s courses with one specific purpose in mind: convince them that they are ready to trade, so they need to make deposit
“We’ve all acquired some education a bit of this a bit of that.” (A. S. Pushkin. Eugene Onegin. Translation by Charles H. Johnston).
I have just recalled these words of this classical writer. You need to use search systems to learn about Forex education in as much detail as possible before you purchase a paid course. At first, you need to make sure that you really need some paid course before you purchase it.
Do not attempt to start trading with buying “magic” indicators that show great results of testing on history data and promising automatic enrichment within a short period of time. Expert Advisor is just a tool that enables you to automate execution of trading algorithms developed by some person. No matter how extraordinary is the algorithm, it requires adjustment allowing for changing trading conditions.
Use demo accounts to test your abilities, but forex cent accounts are even better. Credit your demo account for 1, 000 virtual cents and trade in all seriousness. Make sure to carry out an experiment with leverage and its influence on losses. The best way to analyze trades is to take screenshots of a chart for analysis of opening and closing trades (profit or loss). If you are able to explain yourself the reason for opening every trade, making profit or incurring loss (explanation that the price has gone in the wrong direction will not fly here), then you are 25% ready to start a real trading. But only for 25%.
Below is the list of reasons for failures of beginning traders. Eliminate the reasons in yourself and get ready for trading in the Forex:
— not being aware that Forex trading should be taken seriously;
— not being aware of price movement in the Forex market;
— having no trading strategy and discipline;
— having no right idea about money management.