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Learn Forex Trading > Introduction to Forex Trade > Why Forex Traders Lose Money ?
Why Forex Traders Lose Money ?

If youíve been trading for a long time, you no doubt have felt that a monstrous, invisible hand sometimes reaches into your trading account and takes out money. It doesnít seem to matter how smart are you, how many seminars you attend or how many hours you spend analyzing the charts, you just canít seem to prevent that invisible hand from depleting your trading account funds.

So why do traders lose? Whether you are a seasoned professional or just thinking about opening your first trading account, the ability to stop the invisible hand is a real challenge.

To be a consistently successful trader, then you must have a defined trading methodology, which is simply a clear and concise way of looking at markets. Guessing or going by gut instinct wonít work over the long run.

A Lack of Discipline is main invisible hand who takes out your money. If the way you view a price chart or evaluate a potential trade setup is different from how you did it a month ago, then you have either not identified your methodology or you lack the discipline to follow the methodology you have identified.

In very simple terms a day trader will buys and sells with a very short period which is typically measured in minutes with trading positions being opened and closed within the same trading day. Day trading is particularly suited to high volume, volatile markets such as the Forex but is certainly not limited to currency trading.

As a day tarder you will be working to very short time frames during the wave of a trade as it gains momentum and the jumping off as it crests in order to ride the next wave. Spotting the waves as they roll in and knowing just when to jump on and jump off requires both skill and practice.

Day trading in its truest form is a risky business and if you want to try you should know exactly what you are doing as, while it can be very profitable, it can also produce very large losses very quickly.

For those who enjoy the excitement of the roller coaster ride then day trading can be both exciting and profitable but it is not something for the novice forex trader and should only be contemplated once you have cut your teeth in the world of currency trading and gained a fair amount of experience.


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