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

marco_mmbiz

Sergeant
Messages
182
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.
 

John perry

Corporal
Messages
135
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
 
Messages
198
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 :(
 

bigdolly

2nd Lieutenant
Messages
1,024
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.
 

Thoris

Corporal
Messages
152
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.
 
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