Why Most New Forex Traders Fail?
1 min read
The extreme amount of leverage—the use of borrowed capital to extend the potential return of investments—provided by the market, and therefore the relatively small amounts of margin required when trading currencies, deny traders the chance to form numerous low-risk mistakes.
Factors specific to trading currencies can cause some traders to expect greater investment returns than the market can consistently offer, or to require more risk than they might when trading in other markets.
Certain mistakes can keep traders from achieving their investment goals. Below are a number of the common pitfalls which will plague forex traders:
- Not Maintaining Trading Discipline
- Trading Without a Plan
- Failing to Adapt to the Market
- Having Unrealistic Expectations
- Poor Risk and Money Management
Although these mistakes can afflict all kinds of traders and investors, issues inherent within the forex market can significantly increase trading risks. The significant amount of monetary leverage afforded forex traders presents additional risks that has got to be managed.
Leverage provides traders with a chance to reinforce returns. But leverage and therefore the commensurate financial risk may be a double-edged sword that amplifies the downside the maximum amount because it adds to potential gains.
