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8 Reasons Why FOREX Traders Lose Money

Forex traders lose money at some point in their life in the financial market. Regardless of whether we trade stocks, futures or forex, most traders simply lose money during trades.

I think you’re curious as to why this is a proven fact!

I still remember my first winning operations, but to be honest it was luckier than anything else. Like most beginners, I made some profit, but the knowledge applied was zero.

Now the fact is that there are statistics that show that more than 78% of all forex traders lose money and even give up.

Especially new traders who struggle hard to become profitable.

This article is designed to help new Forex traders understand more about the pitfalls that exist in this market.

To make it easier, I’ve gathered the eight most important reasons traders lose.

Find out how to stop being a losing Forex trader!

Be aware of the eight reasons, if internalizing them will surely start the path to stop being a loser.


I start with a lack of knowledge. This is probably the main reason why traders lose money. I’ve been in the Forex market for about 6 years and i still make some little mistakes. So why should you think that just watch some videos on Youtube or take a course and it gets operational … I lost a lot of money and for a long time because I thought the same way.

If things aren’t failing, you’re not innovating enough – Elon Musk

Do you remember that unpleasant feeling when you make a mistake that really hurts you? Thank you, because that will be the same feeling that will be the driving force of your decision and reason. If a less good operation doesn’t cause you any sense of “failure”, you’ll most likely forget and make the same mistake again.

How can I not make this mistake?

Before starting a Forex operation, try to see the “big picture”. There are several sites where you can find lots of information.

2. Risk Management

Well, risk management is not usually a priority for beginners in the Forex market, perhaps not even imagine how fundamental this action is. It is very common not to use the well-known Stop Loss and the appropriate lot to the capital of your account.

When there is no risk management, it will certainly put all your capital at risk. So I invite you to know the 11 fundamental tips on Risk Management in the Forex market.

How can I not make this mistake?

Use Stop Loss and Take Profit in a calculated way, i.e. before opening a position know where you will position your output in all your operations. This action avoids large losses or profits, which can simply fade with a simple market downturn.

You can use an indicator or Expert Advisor (if you think about using robot I recommend consulting ramil minniakhmetov) to automate partially or totally your operations.

3. Admit you’re wrong

In this market there is no point in “blaming others”. An unsuccessful operation is a wrong operation, learn to deal with it. Focus on the learning that this error will provide you and with each new operation do not make the previous mistake.

How can I not make this mistake?

An operation with injury will happen, and it is useless to stick your head in the sand. Don’t be afraid to make mistakes, even the best traders in the financial market know that making mistakes is normal, it’s part of the route. However, what is not normal is to miss too much.

4. Fear, Greed, Revenge – Summing Up Emotions

The biggest enemy of a beginner trader is not knowing how to deal with emotions, this will be your worst nightmare during trading. Sometimes they even end up hindering the path of any trader.

The fear of losing to a retraction or not this does not happen after its exhaustive analysis will probably cause you to leave the operation too early in which you could have made more profit or not have left in loss.

Revenge is perhaps the worst of emotions. As already mentioned above it is important to take the error and learn from it. This emotion is the cause of a lot of broken accounts, the warning remains.

Imagine, your Stop Loss has been hit by 3 points after the price flies in the desired direction. At this moment, furious and incredulous, he reexamines the chart and looks for another entry point, what will happen after entering? Lose again. Then repeat, repeat and repeat, sometimes even increasing the Lot to compensate for the loss… What’s going to happen in the end?

€0.00 in your account…

How can I not make this mistake?

Since emotions will never help during an operation. Meditating is an excellent way to correct this detail (I’m serious). There is no other solution. You know the point of entry and the exit point, trust your analysis. If your analysis was not correct, accept and study further.

5. Not having an operation plan

Opens your trading platform and now? What is your trading plan? When and why do you decide to operate a certain pair? Or are you just operating randomly to see what happens? Most traders end up trading Longs at the tops and Shorts on the bottoms and end up losing confidence in their Forex Trading skills.

An operation plan is essential to achieve consistent profits in the financial market. Therefore, before entering an operation, it is useful to know precisely why you are performing this operation.

How can I not make this mistake?

It’s very simple, create an operation plan and follow it. yes, it’s hard to follow. It’s a common state for humans to hold on to losses for too long and close the profits too soon.

Therefore, creating a good plan will not be enough, it is important to learn to control your emotions. Obviously a good plan also encompasses excellent risk management.

6. No time

Do you have any idea how long a professional forex trader spends operating every day? It’s as much as what you spend on a day job (sometimes much more). Why do most novice traders think that with just 15 minutes of graphical analysis and a mobile phone, they will be able to make consistent profits?

Being a forex trader is not as simple as you think, it takes time and a lot of training. Even when you have time to examine the markets, you still need time to know where the good entry points are. Don’t be upset, as most of those who start on this journey can’t get to a professional trader. Even so, it is possible to get profits, it’s all a matter of finding a good setup.

How can I not make this mistake?

You can simply use an Expert Advisor or indicator to automate your operations partially or completely, and thus save time. I confess that I partially automate my negotiations according to my strategy and investment plan.

There are hundreds if not thousands of Free and Paid Expert Advisors, it is a matter of conducting a web search or MQL5 communication.

7. Wrong broker / account

You chose to apply your money to a broker because you saw a promotional banner or found a possible tradegrammer mentor (Trader + Instagrammer) offering your free services. In both situations they create the feeling in itself that you will make a good investment or that it is possible to get rich easily.

Allow me to inform you the brokerage or affiliation business is extremely lucrative. Therefore, a forex trader should always check the prices of each pair, regulation, support, money withdrawal policy, trading platform, etc.

Complaining about your broker or “mentor” is also lack of knowledge. There are lots of official websites or forums where you can check reviews.

How can I not make this mistake?

The most important action is to search for reviews on unbiased websites. Make sure the broker is blacklisted from a regulatory site.

8. Buy the wrong Indicator or Expert Advisor

You don’t have to worry. I’m not promoting any. So instead of believing any EA story/Holy Grail Indicators, just use your common sense. If it sounds too good to be true… probably is.

How can I not make this mistake?

I recommend that you research very well, ask for opinions, reports or demos, there are many ways to see the veracity of the facts that present to you before acquiring anything.

If new questions arise, do not hesitate to contact us.

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