The solution to Overcome 6 Causes of Forex Trading Failure
Trading on the foreign exchange market (Forex) is not based on exact science. Optimizing the number of trades in an account can only be possible with the learning experience (both from a demo account, as well as from other experienced traders) and reading books. Both are the only profitable trading keys so that almost all of us will get rich in a short time. In this article, you will find out some of the causes of forex trading failure.
Indonesia’s trading world is in a “bleak period”!
Why? Because the majority of “career” Indonesian traders (especially beginners) stop prematurely before they can produce anything. Even though there are so many who have spent so much time reaching for opportunities in the market, they have not been able to get meaningful results.
There are many things that cause the forex traders’ trading journey in Indonesia to stop quickly like a withered flower before it develops. This time, we will try to discuss at least 6 causes of failure in the following trading ways to overcome them.
Cause # 1: Don’t make trading a habit
Have you ever seen workers in a kretek cigarette factory who can roll 350 cigarettes per hour very neatly? Or a typist who can type 80 words per minute without error, even without the need to look at the keyboard?
The secret is a practice which then becomes a habit. That’s why they look very good at doing these things.
In trading too. As long as you are still not used to analyzing and making decisions, then you will still “stutter”. Your “steps” will falter and you will be bored because you think forex trading is not the right choice. Even though the problem is not with forex, but with your unfamiliarity.
The solution: make trading activities as a habit.
Spend time every day to monitor, analyze and make transactions. Well, in this “habituation” process, you can use a demo account first.
Cause # 2: Confidence problems
There are two problems with confidence:
– Lack of confidence
– Too confident
Lack of confidence due to lack of knowledge. Too many negative things that fill the mind. Afraid of wrong estimates, fear of loss, and so on. These fears prevent you from making transactions and finally there are many opportunities for gold to be missed.
The solution: multiply learning.
Complete your knowledge with trading techniques as well as capital management and risk management, so several times the loss will not affect your trading results, because overall you can still enjoy sweet profits.
Conversely, too high self-confidence can be a problem. Confidence will cause you to be undisciplined in the trading plan. Instead of getting a profit, even a big loss will always haunt you until it is strong when it will “kill” your account.
The solution: Remember that you can’t control the market.
The market is always right. So obey your trading system, capital management, and risk management. When all the parameters say you have to get out of the market, then go out. In other words, obey your trading plan!
Cause # 3: Too much learning about the trading theory
A lot of beginner traders are “crazy” in consuming various theories, tricks and strategies so they forget that they will not produce anything without practice in the real market. They do not realize that in fact, they do not need a theory that is too complicated or sophisticated to be able to capture the opportunities that exist in the market. Finally, they became confused, which theory they should use.
The solution: Learn only one or the most two trading systems.
The key is: choose the trading system that best suits your character/trading style. In fact, professional traders only use one or two simple strategies consistently.
Learning is necessary, but learning too much trading theory will only confuse you. All that is “too” is not good.
Cause # 4: It’s too easy to give up
Often when a beginner trader gets successive losses. “This is not my world,” they said. Though several times the loss is a natural thing in business.
What makes them “surrender” is usually the amount of loss they suffer. This is because they do not have good knowledge of capital management and risk management.
The solution: be aware that losses are only risks that are part of any business, including trading.
In order to minimize risk, learn and apply good and correct risk management, so you will have more opportunities to take advantage of market movements.
Cause # 5: Don’t have a plan
“If you fail to plan, you plan to fail.“
Traders who make transactions only sporadically, without careful planning, can never last long in the per-trading scene. Maybe in some cases, there are beginners who can benefit at the beginning of their trading journey, but no one can maintain that achievement. Instead, they are usually “finished” in just a matter of weeks.
The solution is to have a trading plan. Among others :
- there are rules that you must follow including risk limits,
- money management
Do not forget: discipline and use your forex trading plan. In trading, there is a message that reads, “Plan your trade, trade your plan.”
Cause # 6: Not focused
Most beginner traders – especially part-timers – don’t have much time to do analysis and transactions because of their busyness. Finally, they only make transactions in their spare time. Unfortunately, most of the free time they have is actually “quiet” times when there isn’t much significant movement in the market.
Even if it turns out free time coincides with the “rush hour” of the market, then you don’t concentrate. Sometimes their attention is distracted by television shows, interesting chat topics, or maybe whining the child who invites to play. As a result, there are lots of missed opportunities. Trading is not optimal, it cannot provide the expected results, and in turn, will only make you leave a tremendous opportunity.
The solution: provide a special time for trading.
The market will usually be crowded at 14.00-21.00. Choose a time between these hours. It doesn’t take too long, just one or two hours a day, if your activity is already solid enough. If your time can be longer, keep alternating with a break of about half to one hour every two hours. This is important to maintain your fitness.
If possible, also provide a special place for trading activities, where you can minimize disruption. If this is not possible, make an agreement with a friend or other family member that you do not want to be disturbed during your trading hours.
Hopefully, this exposure can prevent you from becoming a trader who “withers before developing”, and the world of Indonesian trading will soon come out of this “gloomy period”.