Why do most speculative traders lose money.

Factor

Professional trader

Forex Newbie

The ratio of risk to profit when opening a transaction

1:2 – 1:10

2: 1 - 10: 1, or do not have a clue (I would take 2-3 points and that's it ...)

Analytics - related to the recommendations of other traders or analysts

They don’t read or read, but only the essence is taken into account, and decisions on opening a transaction are made only on the basis of their conclusions

They don’t read or read, but only the essence is taken into account, and decisions on opening a transaction are made only on the basis of their conclusions

They don’t read or read, but only the essence is taken into account, and decisions on opening a transaction are made only on the basis of their conclusions

Use 1-2 (maximum 3-5) forex strategies, but each is applicable for a specific situation and each is fluent

As soon as they don’t trade: pips, scalp, trade on the news, listen to everyone, try to apply all strategies, as a result, they are ready to buy and sell at the same time ...

Maximum risk on deposit for each transaction

2-4% maximum

They want to get everything at once from 10%, or do not take into account this percentage at all as a result, a margin call “comes”

Trading Interval

Mostly 4 hours or 1 day, rarely 1 hour or 30 minutes

From 1 minute a maximum of 15 minutes, because the size of the deposit does not allow to open large lots, but they do not understand that it is possible to trade a small lot in small accounts (micro-accounts, cent accounts) but in the range of at least 1 hour

Attitude to trade

And + 10-20% to the deposit per month a very good result

They want out of $ 10 to earn a million and moreover ...

Trend Trading

They try to trade only according to the trend, they trade against the trend only after receiving several signals about a reversal, but after having thoroughly analyzed the market and the trend

Mostly they trade only against the trend (because they don’t know where it is directed at all) - that's why they lose money ...

They do not take into account the long-term trend (trade for 1-5 minutes, even if the trend, but at the same time the trend is directed in the opposite direction for 15-1 hours) - as a result, sometimes the trend eats up the deposit

Transaction validity

Several signals were received for concluding a deal (more than 2-3 from different indicators or during technical analysis)

“I think we need to sell now ...” (or buy) there are no signals from the market or there is signal 1 or 2, but it contradicts signals over a longer time interval or has not yet been confirmed ...

Stop loss

Mostly always! If they don’t even bet, then they know exactly where they will close the losing trade and approximately when

If they set, then they are not commensurate with the size of the profit or they think, “they will carry it” (or “stop-loss only the deposit can be lost faster”)

Profit Target (Take Profit)

They always know where to take profits or when to close a position that has not worked out as it was calculated. Basically, profit is fixed in parts in a% ratio.

“I’ll see the profit - I’ll close it (and all at once),” but I won’t close the losing trade - “what if the price comes back ...”

Adding to line item

It is added only to an already open profitable position, and on market pullbacks

Added to a losing position

Demo account

They trade only if they need to work out a new strategy or work it out on history. Or they don’t trade at all which basically happens.

They trade, earn demo millions, get used to trading on "air money", when trading on which psychology is not taken into account, and then they open with pride a REAL account and merge a deposit

Locking Positions (Hedging)

If hedging positions, then for different currency pairs, and not for one getting into the castle.

The castle is the first reaction to fear (often fall into it)

The desire to recoup (to take “mine” from the market)

absent

Pursues always. Earned well, but lost "I’ll get my thing back now" as a result, they lose even more.

Trading time

They do not always trade only when good signals appear and confirm They seek only the best opportunities for concluding a deal.

They always trade, and sometimes for days (although fatigue also badly affects the trading process)

Greed

They are trying to exclude this factor, because it is often fatal

They can’t stop “I’ve earned, so now I’ll earn even more” and the opportunity has actually already left as a result, after a series of profitable transactions, they lose their deposit (especially if they increase the lot size several times)

Fear

None they always understand that any transaction can bring a loss, but if there are confirmed signals, you need to trade ...

In some doses it is useful (they skip unprofitable transactions), but excessive fear does not allow you to conclude deals at the right time (and then, after the newcomer is convinced that a lot of fear is also bad, he thinks “he was 2 times afraid, and the deals were would be profitable ... ”concludes a deal, but forgot that we need good confirmation signals

The spirit of success

I am confident in my abilities, because knows what does

There is a desire to make money, but it is not supported by experience, and disappears as the loss is received. Or, even worse, it is absent there is nothing to do with such a mood in the market.

Lot size increase

It increases, but only in the percentage ratio mentioned above - 3-4% of the depot (increased deposit - the lot grows, decreased - and the lot decreases)

Often a disproportionately large deposit increases the lot, which is very detrimental to the deposit

Leverage

Actually does not play a role, because Depot protection program is already included - 3-4% of the risk from the depot for each transaction.

Usually he tries to choose the maximum: 1: 400-1: 500, which very often leads to margin call.

Deposit amount

Role does not play

He is trying to open more, but not realizing that this is not the main thing first you need to learn how to trade with little money, and only then with big

Origin of deposit

It mainly trades on its own, and it is precisely those that can afford to lose

He trades or it’s better to even say “Plays” for everything, and even more so, if for credit or employed.

Withdraw funds

Periodically removes the profit (for example, by doubling or a certain percentage at the end of the month), and in cases of loss of the remaining part (and everything can happen on Forex and you need to be prepared for this) - this is not a failure for him, because he took most of the profit and can always replenish the deposit

Even if he makes money, he “plays” everything and it’s not strange, the more he earns the more he risks in the end, even by doubling the deposit or tripling, or ... - he loses everything without even taking the initial amount of the first deposit.

Forex Brokerage

No matter where to trade, the main thing is that the company has a good reputation and returns funds on demand

It is believed that their final result depends on the choice of a broker by 90% and if they suffer a loss, they blame it on everything, although in fact the reason for the losses is a bad strategy and psychology of the trader

Spread

Of course, they try to find a company with a lower spread (because they trade in large lots), but this is not the main criterion when choosing a brokerage company

Basically they are looking for companies with a spread as little as possible, but at the same time they forget that sometimes unscrupulous DCs attract customers with these

Trading terminal

They choose a convenient one and one with which they constantly work, do not jump every day to a new one

They want to try everything in the end, they can’t figure it out with one

Trading Instruments

Mostly they trade on 2-3 currency pairs (choose those that give more signals) and several futures contracts - as they are well acquainted with them and are well aware of their basic patterns and behavior when trading and constantly analyze them. They never "climb" on those tools with which they are new to and moreover, thorough analysis has not been carried out on them.

Trade on all currency pairs, etc. etc., because they think "there is no luck, then now I’ll earn ..."

Availability of a trading plan

Always present, even if in the head

Missing and sometimes even talking about him can not be

Keeping diaries

It constantly keeps some notes, analyzes errors, although it is not necessary to regularly write down something in it there is a thought or plan then it fixes

Sometimes they fundamentally do not want to lead him, and sometimes they relate to this with a grin

Attitude to trade

Relate to both work

How to a game in which you can win a million and do not understand that for this you need to make an effort, and not a little ...