The number one killer - Leverage

When new traders enter the forex market they do so because they are for whatever reason confident that they will make money. No one thinks they will be in the infamous catagory of the 90 - 95% that fail in the forex market. Because of this they often set their leverage far too high and risk way too much per trade. No matter how many winning trades are made a couple really bad trades can do major damage to a trading account extremly fast. The feeling of taking huge losses is generally enough for traders to give up and move on with other investments. Ask yourself, if banks and large investment firms do not use much leverage what makes the average trader know better? The most leverage we would suggest for a really aggressive trader is 1:50.

Emotions and losing trades

Often times it is very difficult to stay in a losing trade. Understand though that selling at a loss will guarantee failure. It seems obvious but the only way to make money in the forex market is to sell when it is possible to make a profit. Use careful judgement when you do decided to take a loss. Be sure you have strong evidence that the trade will continue to lose before selling.

Just as easily as one could sell at a loss too early he or she could hold onto a trade far too long. If the trade continues to run without a clear strategy for money management eventually all money invested on that trade could vanish if the trade continues against the trader.

You can see how difficult dealing with losing trades can be if you do not have a trading system to follow. One reason why 90 - 95% fail in forex is because the invester does not have a solid trading system.

Emotions and winning trades

It is easy to get excited when profit is available for the taking. Just because there is a small profit does not mean you should take it immediately. You must wait for the right moment to take profit to maximize your return on investment. If you take profit winning $5 at a time and sell at a loss when you are down $50 then you have to win 91% of your trades to make money. Do you know anyone that makes winning trades 91% of the time?

Inability to follow trading advice and systems

There are many forex trading strategies and guides with valuable information available. Our easy forex trading system is one of them. If a system is proven to work do not reinvent the wheel. Follow the advice you have been given!

Checkout our trading system here.