The Forex market has changed through the years, growing in volume and expanding across multiple time zones.
Brokerage houses have changed, too, going online with sophisticated software and powerful servers.
Economic indicators and technical analysis have become more sophisticated, too, until the Forex market of today bears little resemblance to what it used to be.
But there’s one thing that hasn’t changed: most traders lose.
Despite all the advances in the Forex marketplace, the ratio of winners to losers remains low. Experts agree that the most hopeful number that can be advanced is a measly 10%, which means that 90% of all traders on any particular day will lose.
Experts also agree that the reason most traders lose is because they allow their emotions to cloud their judgment.
Most people trade on hope and fear, rather than facts. Rather than basing their trades on what the charts and the indicators actually say, these people trade on what they want them to say. They hang onto a losing trade and follow the graph down, hoping the currency pair will turn around. Or they exit a trade too soon, fearing the trend won’t last, and are satisfied with pennies that even the best Forex money management cannot balance against their losses.
Other people lose through greed, by trying to pick the highs and lows too nicely to maximize their profits to the penny. Rather than waiting to place a trade when the indicators confirm the market’s movement, they jump in too soon and are disappointed when the anticipated break-out never occurs.
Brokerage houses have changed, too, going online with sophisticated software and powerful servers.
Economic indicators and technical analysis have become more sophisticated, too, until the Forex market of today bears little resemblance to what it used to be.
But there’s one thing that hasn’t changed: most traders lose.
Despite all the advances in the Forex marketplace, the ratio of winners to losers remains low. Experts agree that the most hopeful number that can be advanced is a measly 10%, which means that 90% of all traders on any particular day will lose.
Experts also agree that the reason most traders lose is because they allow their emotions to cloud their judgment.
Most people trade on hope and fear, rather than facts. Rather than basing their trades on what the charts and the indicators actually say, these people trade on what they want them to say. They hang onto a losing trade and follow the graph down, hoping the currency pair will turn around. Or they exit a trade too soon, fearing the trend won’t last, and are satisfied with pennies that even the best Forex money management cannot balance against their losses.
Other people lose through greed, by trying to pick the highs and lows too nicely to maximize their profits to the penny. Rather than waiting to place a trade when the indicators confirm the market’s movement, they jump in too soon and are disappointed when the anticipated break-out never occurs.
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