He has a monthly readership of , traders and has taught over 20, students. You can even email it to a trading friend. Most importantly, make sure you make a nice comment with your feedback at the bottom. As I always say, If you get value from these lessons, all I ask is that you share it around with friends and other traders who will benefit from it. I appreciate your support and will talk soon. Statistically speaking, trading the Forex market with a 1: Thus, most traders should approximately breakeven over the long run because trading with a truly random entry and a 1: Why do most Forex traders lose money then?
What human variables contribute to the success rate being much lower than breakeven for most traders? Perhaps the main reason most traders lose money is because the majority of people have little self-control and cannot resist the temptation to over-trade and over-leverage when there is no one to be accountable to. Another main reason most traders lose money is because they try to buck the trend for some reason, even though they KNOW they have a statistically higher chance of winning by sticking with the trend until it is clearly finished.
In this article I will share with you my thoughts on why otherwise totally rational and successful people fall apart when it comes to trading the Forex market. As human beings we all have a tendency to pass the blame and find fault elsewhere.
Everything that happens to you in the market, good or bad, is ultimately your fault; blaming anyone else or thing is not going to help you become a successful trader. Accepting responsibility for your losses and trading mistakes is paramount to turning your trading around. The first step in any self-help group like Alcoholics Anonymous is admitting you are the problem and that you have a problem. One thing that definitely prevents most traders from making money in the market is over-trading.
Traders who just jump in and out of the market on emotion and greed, will not only suffer many more losing trades, but they will also rack up a lot more fees via spreads and or commissions over the course of a year than traders who stick to the higher time frames and understand the value of self discipline and having patience.
So, if you are currently losing money on a consistent basis and you are trading lower time frames, you will definitely benefit by switching to higher time frame Forex trading. How many times have you won a few trades in a row, made some money, and then given it all back quicker than you made it? This happens all too often for traders who have not yet learned to risk the same amount every trade or who have not yet learned to manage their emotions effectively.
That is not how it works. So, if you are equally confident in every trade you take, because you have mastered price action trading, there really is no reason to risk substantially more or less on any single trade. You want to keep your risk amount approximately constant relative to your total account value. If there is one single thing that most traders do wrong who lose money on a consistent basis, it is poor trade management.
Every trader knows after a little practice and education on a high-probability trading method like price action, they can pick near-term market direction with pretty good accuracy, at least enough to get into open profit.
This is not the hard part of trading. The hard part comes after you enter a trade. This is just ridiculous. No human being on Earth will be more objective or less emotional than they will be when there money is NOT on the line. So, if you are guilty of not managing your trades BEFORE entering them, accept responsibility right now and start changing it.
A related topic here is having a Forex trading plan. Your trade management plan should just be one part of your overall Forex trading plan. Your trading plan should also include a Forex trading journal. When you learn one effective trading strategy like price action, and truly master one Forex trading strategy at a time , you will largely eliminate the problem of fear and second guessing your own trades. Most aspiring traders just jump around from one trading strategy or system to the next, never really giving one enough time to truly master it.
So, the first thing is that you need a truly effective trading strategy, and then you have to give it enough time to truly master it. Finally, one thing that is definitely common to all traders who are losing money in the markets is that they have unrealistic expectations. Being a successful trader means you are consistently making money in the markets. If you have a small trading account but are making consistent profits that are in-line with your small account, then you ARE a successful trader.
The same habits that make a trader successful on a small account are the SAME habits of successful traders of large accounts. Forex trading success is not measured by whether or not you get-rich-quick, it is measured by your consistency, and the only way you can become consistent is if your expectations are in-line with the reality of your current financial situation and the reality of the markets.
Yes this is a good article Nail. I think I have over trade and not discipline enough I will change my taught and learn more in price action. Hi thank you so much for posting all these useful information we all have this problem and need to stop them before losing lots of money very helpful tips thank you so very much. A smashing good read for me! I used to have those unrealistsic expectations but no longer.
I am in sync with the market and my money management because of the methods learned through price action! I will be joining your website as soon as I can to learn what it takes to be successful. But I find it hard to break the Habit. I am trying to change my brain to be a forex trader. I try and talk myself out of being near a computer screen but I end up sabotaging my trades.
It comes down to being confident in price action and my ability to read a signal. I will come out of this tunnel a forex trader. Thanks again for Nial for a concise and succinct article. Hi Guru Nial, good article,it is true to just apply ur teaching to be consistently profittable,i joined as a member in Feb.
Hrad lesson learned even after getting good tutoring from you. Great article again, Thanks a lot we need it. I do like this way to focus on things like what to do after the enter of a trade, as I think is something that is hard to handle. Both when the trade is going your way, or the other way, it is truly important to have a plan before entering the trade.
Hi Nial,What a great article!!! Thanks you for sharing with us your exprience Im always looking forward for these articles they make my weekend tick…. AS I read your words, I personalise each action by asking myself the question.
Do I accept responsibility for my losses and mistakes? Do I over trade? Do I risk to much? You get the idea. It is easy to just read an article and flip the page over. Your article is a reality check for me. I take my trading very seriously and look for what leaps out at me. OK 4 out of 6 is not bad. That is why I am a member, to work on getting my act together for successful trading. Thank you for all.
Today I trade with PriceAction only. You teach me all forms of sucess with it. Have been introduced to your site by a friend. I look forward to learning real skills in forex trading.
Have had all those issues, but my main problem was over trading with a small amount. Had some good results and a few negative ones. Trouble is the negative ones were higher values than the positive, and so traded even more. Summed up all the issues I had, and am still working on perfectly. I look forward to each lesson you post. This information must be read many times before it really sticks.
It is so easy to read the wrong information into a chart. Over trading is akin to playing video games. I have done it in the past, but no more. With your help I am becoming more profitable every day. One of the best articles which I have ever read. The things that you have mentioned on yo9ur article Nial, are more important than most of knowledge that traders should have.
Great Jobs and Thanks Nial. Yes Nial, it needed to be said and you said it straight and to the point. A useful reminder to us all. Thank you for another great article.
I am always looking forward to a new one. Your arcticles help me from psychological point of view and I read them over and over again.
I look forward to your lessons. Really great article Nial, I think you have well pointed out and explained the hidden secret to becoming a consistently profitable trader rarely found elsewhere. Your lessons bring immense physiological confidence on trading while educating the reality of the market.
Pleasure to be as a member of your community.More...