Trading Failure: Why 90% of Traders Fail
Trading failure is a common term that happens for any types of traders whether they choose to trade binary options or others. As a trader, you have to consistently make decisions based on the market movement, whether you are new or experienced.
Though we have mentioned the highest percentage in the title, it depends how new you are in the trading market. But the general statistic shows that almost 90% of traders lose their funds. However, the number could be higher or lower than our expectation.
Before that, it will be a smart move for you if you rethink your trading plan before placing a trade.
After one to one discussion with traders, we felt a need to dig more in-depth to explain reasons for trader’s failure. So, today, we will give you some pinpoint that you need to follow to make each trade profitable.
Trading Failure: Why 90% Of Traders Fail
Trading is not about being perfect, it’s a clear mindset. You can’t always predict the right asset price movement. But to be a successful trader, you have to sync perfectly with the market and learn how to generate profits from the most volatile condition.
I will share with you the 5 reasons why most traders lose their investment. Hopefully, this article will help you to prevent your money from draining out.
Am I Right Or I Am Right
What clicks on your mind after hearing the term “right trading assets”?
Choosing the right asset or trading instruments is a vital role for traders. Remember, it will increase your winning rate. But the burning question is, how do you choose the right instrument that likely suits you as a trader?
Here, you have to follow some tips before selecting an asset or asset pair. Except for binary trading, you need to choose a perfect spread and leverage level for other trading types. You also know the market scenario of a particular asset.
Mostly new traders do not bother to analyze the trading market every day before opening a position. They select an asset because it is on the top level of the trading list.
So, choose the asset type considering all things together.
Don’t Want To Learn More And More
Do not run behind the money without knowing how to generate it for a lifetime. Trading knowledge is a gatekeeper which ensures your profits. For being a trader, you need the money and a trading device. But for being a professional, you need proper education.
Moreover, you will find many intelligent people in this industry who has spent many years learning how to be a professional trader.
So, forget the fact that you only have to make money from trading. You need more knowledge than simply knowing when to buy and sell. So, learn the industry first.
Not An Uphill Battel
Trading analysis is the key element for traders. Technical analysis is a method of using market data with asset past and future price. At the same time, from the daily market analysis, you will get the price movement of the global market.
An economic calendar is one of your best friends. It shows you the scheduled news and events that are related to the trading market. However, novice traders sometimes forgot to check the economic calendar every morning. But under any market condition, you should know what your risk on every single trade.
Strategies Need To Be Clean
Trading strategies will make a trader over powerful if he or she can implement it properly. I tried to learn different trading strategies almost every day by thinking that these will make a better trader.
Eventually, it changes nothing. On the other hand, another group of traders try to fix one or two trading strategies. Usually, it is not hard to find trading strategies. It is wise to change the strategy based on trading time and asset.
Online sites and trading forums are the best places to find trading strategies. However, finding the best strategy that suits your personality is a different thing.
On the other hand, the right trading plan will show you the right direction. A trading plan covers everything from the entry to exit level. Most traders enter into the trading world without any trading plan.
So, try to make a plan and follow that in a regular basis.
Poor Risk Management
You can have the best trading strategy, but with poor risk management, you will end up with an empty house. Surprisingly, risk management plays a vital role in traders’ failure.
If you want to succeed in the trading business, learn everything you can on proper money management or risk management.
For novice traders, it is recommended not to risk more than 1% to 2%.
Trading is not a hobby for everyone. It is just a professional career. It takes years of practice and effort to make yourself perfect in this field. At the same time, you have that willingness to learn from your mistakes.
Except for above-described reasons, other reasons are also involved behind every losing trade. If you reduce the number of trading mistakes, you will make a success in the long run.