Six key reasons why traders are losing money

danydebrown

New member
In every business, there will be ups and downs. No matter how much effort you put to develop a certain business from scratch, you are not going to experience an exponential profit curve. Due to the basics nature of supply and demand in the global market, you will have to face ups and downs in your cash flow. Those who live in Singapore might say, the experienced traders are always making a profit and they don’t have to work hard. But this is a big fat lie. Even the institutional traders are losing money and they have worked hard to develop their skills. Due to their strong determination and devotion, they have managed to create a perfect trading system. Let’s discuss the top six reasons for which the investors are losing money.

Failing to understand the market nature
Those who are new in the trading profession, don’t understand why the price of the financial instrument is changing. They don’t understand how the financial market works. Without having strong knowledge on a certain topic, it’s nearly impossible to make a profit from this market. As a new trader, you have to take advantage of the Saxo demo account and trade the market with managed risk. Try to develop your skills based on simple logic and trade the market with low risk.

Failing to manage the cash flow
You must learn to manage the cash flow in any business. You might get the responsibility of the big business but without having the cash flow management skills, you are going to lose a huge sum of money. To make your life much better, you have to push things to the next level. Never think you can change your life without doing the hard work. Know your risk exposure and trade the Forex market based on the principles of successful traders.

Failing to identify the problems
You must learn to identify the problems in trading or else you will never become a successful trader. Those who are making tons of profit know the ins and outs of this market. They regularly revise their trading strategy so that they can keep pace with the dynamic nature of this market. You might think by buying an expensive system from the professional traders, you can make huge profits. Things don’t work like this in real life. Learn from your mistakes and you will improve your skills in trading.

Find a mentor
You must find a mentor to learn the details of this market. Learning the art of trading by reading books and exploring online resources is a very challenging task. Most of the time, the rookie traders fall into the trap. If you get help from the professional mentors it won’t take much time to understand the blueprint of trading. There is nothing wrong to take a professional course in trading. So, do some research and find a good mentor to learn to trade.

Focus on proper research
When you do the market analysis, make sure you focus on in-depth data analysis. Never try to trade the market without doing the homework. Use the technical and fundamental parameters to find the potential trade setups and you will have a much higher win rate. Though these are a very complex process with proper devotion, you can easily change your life. Always remember, emotions can’t help you in the trading business.

Be prepared to lose
You must be prepared to lose trades or else you can’t make a profit in trading. Most of the traders try to avoid losing trades and eventually they make trading a very complex. Forex trading should be considered as a very easy task. Never try to make things complicated by using too many tools or variables. Think like experienced traders and find the trade setups based on simple logic.
 

Edizon

New member
The only way to get rich in the stock market is to participate in a pump & dump. Playing by the rules will rarely get someone results.
 

Mr.Zion

New member
Thanks for this article, it's really useful. Most traders also lose money because of greed and fear of not taking a calculated risk.
 

Sherman198

VIP Contributor
Traders lose money because of the way they start their business. Before starting any business, myriads of research needs to be carried out. You have to conduct a survey to open up a business.....This will give us the edge to know which location to start our business and people to sell our product to. I think the major importance of this, is that it enables to know which product to produce.
 

Sotherefore

VIP Contributor
Business management has a very important rule to play in the success of any business, before we are to succeed in most business , we must first of all know how to manage the business.

Without proper management we may not likely succeed in most type of business we have chosen to do and that is what a lot of people fail understand and so many people believes that because others are succeeding in thier areas of business that automatically they will also succeed. This is not always true in most case.

Those people you believe are exceeding might have dedicated their time to learn and understand about the type of business they are doing. You going there without proper understanding might just be a disaster because you are likely to lose your money.

A lot of people also believe that business is something they can just established as long as they have money and just succeed like that without even preparing to face challenges .

We have to prepare for business challenges because if these challenges met us unprepared , it could result in business failure and that is what we should always try as much as possible to avoid .
 

SANIA

Active member
You have made a very thoughtful and thorough investigation on this interesting topic and I am very pleased and thankful to your for this useful piece of information.
You are absolutely right about these points.
It is really important to understand the ups and downs of the market and to understand how it works.
Without proper guidance the person can make things complex and can actually loose a large sum of money.

Risk is natural in this business.
You have to take risks to earn.
Buy I suggest everyone to start with small capital otherwise you will loose money sooner.

Invest small amounts first and understand the market practically.
It is okay to make mistakes as long as you are learning from these mistakes.

If you have invested a small amount at the start then it is perfectly fine to gain or loose small assets.

The main thing is to see ahead and plan ahead. One cannot make hug success with short term goals.

Learning from experts also sounds good. As a good mentor can help you out in a much faster way than the bad mentor or some fake YouTube gurus.
Learn to differentiate between the legit and the fake ones.

I wish everyone all the best in this business. I hope all can make right decisions to earn good income in this niche.
 

Jasz

VIP Contributor
Trading in financial markets is a great way to make money, but it's also easy to lose money, too. Here are four reasons why people lose money, and what you can do about them.

-Poor risk management. Risk management is essential for trading. When you don't use risk management, you're more likely to make riskier trades and take bigger losses.

-Overconfidence. Overconfidence leads traders to believe they can get away with more risky actions than they can actually execute successfully.

-Ignoring your emotions. Many people think that ignoring their emotions makes them better traders, but it actually just allows them to make more mistakes because they ignore the signs that something is going wrong in their trades.

-Trading when you're bored or stressed out. Trading when you're bored or stressed out leads people to take decisions which are not well thought out and often lead to losses of money.

Are you letting your emotions dictate your trades? If so, this is probably the biggest reason you're losing money. You should be making your trades based on logic and facts, not emotions and gut feelings. Take out the human element in trading to increase your chances of success.
 

blessingc

Active member
Realizing that your business is losing money rather than making it can be a harrowing moment, especially if you don’t understand what you’re doing wrong. there are plenty of reasons why businesses lose money; your only job, as a business owner, is to find out which ones are relevant to you and start making meaningful changes.

As the owner of your business, you might assume that keeping your company funds in your general bank account is the right way to go. Unfortunately, this can prove to be a major mistake.This can make you to spend money that belongs to your business.


Bad accounting can cost you your business, it can make you run multiple losses. Evaluating your pricing should be one of your first lines of defence against disappearing profits. If your business is disorganized it’s undoubtedly costing you somewhere along the line.
Hiring employees is a big and expensive step for your business so, you need to hire the number of workers you can pay, so, you don't over spend.

Small businesses with high overhead, such as restaurants and retail stores, tend to have the highest expenses compared to profits. Try to check what you earn and what you spend, make it work together, so you don't run a loss.
 

Good-Guy

VIP Contributor
I believe that there are many reasons why trader lose money because we cannot say that there is only one reason. The following are the main reason;-

Not Able To Understand And Interpret The Data

I am not sure what kind of trading are favorable for you guys, but I think that when it comes to cryptocurrency trading, you must understand and interpret the data and charts in order to accurately assess the conditions of the market. if you fail to do that, you fail to trade properly and this is what I believe.

Taking Unnecessary Risk

Taking unnecessary risk is also one of the main reasons why many traders usually fail to make a profit and end up suffering. They take unnecessary risk and this is like gambling with your money, despite the fact that it is not literally like gambling in casino.

Not Making An Effective Strategy

Creation of proper strategy is the key to make gains and increase your profits. if you do not make a proper trading strategy, then you will end up losing all you have. Apart from that your trading strategy must consist of a proper risk management plan as well. if you do not plan well and manage your risks, then you will never make money.
 

sincerem

VIP Contributor
What you've described so far is ideal when it comes to participating in forex trading. Those who are going into forex market for the first time should look into this principles which you've put aside for basic idea before going into forex trading. Forex trading is risky but profit can can be made by being disciplined when it comes decision making and executing the finance. Lots of newbies makes the mistake when it comes to forex trading because they got the mindset of milking from the market so quick without the technical and fundamental analysis around the market. We should do the research properly just as you stated before coming up with a trading pattern,, learning and understanding how to trade is better off than investing funds. Learning will help us to know how to manage the risk, how to trade at the right time by spotting the right trading pairs and avoid losing more than he or she will gain.
 

Abigael

Valued Contributor
You have given very good reasons why people loose Money during their trading. Which is a very common thing in all forms of trading. From my own point of view, these are factors that can learn to losses during trading;

1. Lack of proper trading knowledge.

There are so many people who will rush into trading without proper knowledge and skills. They end up just doing the wrong things and that will lead to loss. Most people are pushed into trading by that idea that it is a get rich quick scheme only to find that it really is not.

2. Poor financial management

Some traders do not really know how to manage business funds. You find that they will spend the profit plus the money they would use to buy more stock. Others do it unknowingly due to the mistake of not separating your business funds from your personal finances. It is always best to have separate accounts for them.

3. Natural causes

Sometimes the loss in business could not be caused by the trader. There are natural causes such as disasters, pandemics and political issues in a country. When the whole nation's economy is affected, most traders will feel the pinch too.
 

Chibson

VIP Contributor
Forex trading is a very lucrative business and at the same time it is a very risky business in the sense that if you do not have proper knowledge and understanding of how it works you will probably not make profit. Having proper knowledge of how it works is not even a guarantee that you would make a lot of profit.

It is important to have knowledge and know everything about forex trading and understand the history about it before you venture into it fully because that alone can give you a lot of clue on how to become a successful forex trader.

Before you place a trade it is very important you make a lot of research. Lack of research is one of the main reasons a lot of people lose money in forex trading. many people take forex trading as gambling and therefore they do not make proper research using technical and fundamental analysis in order to make maximum profit.

It is very important you understand technical and fundamental analysis well before you become a forex trader because without them there is no way you can make profit. It is always important for you to use the capital that you are always ready to lose.
 
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