Why do 80-90% of beginner Forex traders lose ALL of their money?

Because 90% of them won't stick to the rule "1lot for every 100k account size".

Examples:
max. account-leverage: 1:500, account size: 5.000USD/EUR/GBP, max. used lot-size per trade: 0.05lot
max. account-leverage: 1:200, account size: 10.000USD/EUR/GBP, max. used lot-size per trade: 0.25lot
max. account-leverage: 1:100, account size: 100.000USD/EUR/GBP, max. used lot-size per trade: 5.00lot
max. account-leverage: 1:500, account size: 125.000USD/EUR/GBP, max. used lot-size per trade: 1.25lot
Personally I'd even go for 1lot on the last example until the account reached 200k and also 1lot for the 3rd example (no matter if the account-leverage is 1:500 or 1:100), which makes it much more safe.

Most traders I see out there have an account-leverage of 1:500 but trade like 1lot or even more on an 1.000USD account. I know it's depending on the assets' margin used, but for the most well-known forex-assets you can use the rule above.
 
Because 90% of them won't stick to the rule "1lot for every 100k account size".

Examples:
max. account-leverage: 1:500, account size: 5.000USD/EUR/GBP, max. used lot-size per trade: 0.05lot
max. account-leverage: 1:200, account size: 10.000USD/EUR/GBP, max. used lot-size per trade: 0.25lot
max. account-leverage: 1:100, account size: 100.000USD/EUR/GBP, max. used lot-size per trade: 5.00lot
max. account-leverage: 1:500, account size: 125.000USD/EUR/GBP, max. used lot-size per trade: 1.25lot
Personally I'd even go for 1lot on the last example until the account reached 200k and also 1lot for the 3rd example (no matter if the account-leverage is 1:500 or 1:100), which makes it much more safe.

Most traders I see out there have an account-leverage of 1:500 but trade like 1lot or even more on an 1.000USD account. I know it's depending on the assets' margin used, but for the most well-known forex-assets you can use the rule above.
wow that is interesting i was working on 0.01 per 250 on 1:500 so will take this in to account thanks
 
lack of risk management and lack of forex trading understanding. its like why do most traders (new) dive into live and not even bother with a demo when signing up to a new broker? it is foolish :(
 
Because of lack of money management.
And risk management too. They set incorrect stop loss or don't set them at all. It is a very dangerous practice simply because probability of getting a trade that can destroy your all account if you don't set stop loss increases with the number and frequency of trades. In other words you are guaranteed to lose without stop loss.
 
I think the main problem is the psychological state of traders. They are very greedy and can't trade. Beginners come with high expectations, and they hope for a quick profit. They do not understand that they earn hard work and their knowledge in Forex.
 
Lack of knowledge and experience: Many beginners enter the Forex market without acquiring sufficient knowledge about trading strategies, risk management, and market dynamics. Without a solid understanding of how the market works, they may make uninformed decisions that lead to losses.
Emotional decision-making: Emotions such as fear, greed, and impatience can significantly impact trading decisions. Beginner traders may fall victim to emotional biases, deviating from their trading plans and making impulsive trades based on short-term market movements or tips from unreliable sources.
Inadequate risk management: Effective risk management is crucial in Forex trading. Beginners may overlook or underestimate the importance of setting appropriate stop-loss levels, position sizing, and risk-reward ratios. Failing to manage risk effectively can lead to significant losses and potential account wipeout.
High leverage and excessive risk-taking: Forex trading allows for high leverage, which amplifies both potential profits and losses. Beginners often misuse or overutilize leverage, exposing themselves to excessive risk without fully understanding the consequences.
Lack of discipline and patience: Successful trading requires discipline, patience, and adherence to a well-defined trading plan. Beginners may deviate from their strategies, overtrade, chase losses, or exit profitable trades prematurely, resulting in inconsistent performance and losses.
Market complexity and volatility: The Forex market is complex and subject to various factors, including economic indicators, geopolitical events, and market sentiment. Beginners may struggle to interpret and analyze these factors effectively, leading to poor trading decisions and losses.
 
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