Reasons Why Many New Forex Traders Fail

The initial rate of success among new forex traders is usually very low. This however improves with time as many of the traders begin to see the benefits of their continued efforts. Unfortunately for a large number of the traders, they simply pack and leave believing that they do not have what it takes to be successful at trading foreign exchange. If you intend to begin a journey in this dynamic and interesting world, below are some of the reasons which are responsible for the failure of many new traders. Watch out for them.

Too high expectations

Many new traders begin their forex journey with unreasonably high expectations. They come already misguided that through online trading, they will be able to become overnight millionaires. Because of this mentally, they focus on making quick money and not on developing sustainable trading strategies which will enable them to have lots of winning trades. As a result, they end up committing mistakes which make them lose their investments and this becomes the end of the road for them in forex.

Trading without a sound plan

A sound trading plan is important to every forex trader just like the radar is important to a ship in the high seas. Many new traders just jump onto the platforms and start trading without an elaborate plan which will guide how they execute their trades. Without a plan, the traders are unable to know where to enter or exit the trades and they also have no idea on the profits they need to make. Success in forex trading requires meticulous planning of every move you make so that you can continuously improve and become a better trader.

Lack of discipline

Even with reasonable expectations and sound trading plans, many new forex traders still fail due to lack of discipline. Discipline here refers to the ability of the traders to faithfully adhere to their plans even in the midst of rapidly changing markets. For instance, a trader may be tempted to adjust their take profits position when they see that their initial point has been surpassed. The moment you start to second guess your decisions and trading plan, you lack discipline and you are likely to fail. Make your trading plan and stick to it.