if 90 percent trader fail in forex trading?
why still so many trade?
- DavidLv 78 years agoFavourite answer
Out of the masses trading, I can think of three major types or situations people find themselves in.
One group has some extra money to burn, and they are probably successful at what they've done in the past, have a computer, and are looking for the next challenge, a boost to their earnings rate, a way to retire rich.
The second group is less fortunate. Have you looked at the jobs numbers over the past five years or more? There are a lot of professionals without a job, or in a desperation job unrelated to their profession; a lot of people are hurting out there, desperate for any hope, any lottery ticket or pot at the end of the rainbow that even slightly gives them a chance to regain their future, their dignity, and their duty as a provider. They have the ability to become successful again, they have the means, so why not give it a shot?
A third group are basically ignorant and looking for a get-rich-quick scheme. The promise of instant riches makes their eyes sparkle, and before making their first trade have already extrapolated their profits into the millions, maybe because they're good at video games and simulators or some other unrealistic reason; they're special, gifted, entitled people, at least in their own eyes.
Ultimately, in direct answer to your question, it is the promise (we all think we can do it, or we wouldn't do it) of huge returns, of more money than ever seemed possible before, made possible by extremely high leverage and very little money invested to begin.
Everyone with an internet connection can start in forex trading with only a few hundred dollars. Low risk with high rewards springs forth hope eternal. It is the only vocation I've ever known where hard work and perseverance don't pay off, or isn't enough, and makes not a spit of difference, but you don't know that until it's over.
And don't forget, it's actually pretty fun until you lose your money. And you can learn something and broaden your horizons to the uptown level of currency trading and risk management and all that big-headed stuff that gives one pride.
Unfortunately, most people think trading is very close to investing, or have no real clue that trading against professional traders on their level inside their rules and playing field is almost futile. They have not a clue that trading is more than 50% psychological, and have no intention of delving into that realm, nor the fortitude, nor any adherence to real honesty or responsibility with themselves that they are driven by the primary emotions of fear and greed, and instead play all kinds of games to justify their own ignorance. Every person comes into this game with rose-colored glasses. It doesn't matter which market is chosen, trading is a vocation with a specific skill set, demeanor, and requirements of any new business. Nobody realizes the danger of high leverage at first. How can you turn a game into a business when living a fantasy?
Many, many very intelligent people have failed at trading, so intelligence is certainly not the answer to success. I am a perfect example (not the brightest bulb in the room). The intelligent people simply come to grips with reality sooner, before losing it all. It's the ignorant fools and hard-heads like me that keep on keeping on buying lottery tickets, or the very desperate, and lose every dime they have, and like any addict, can't wait to get a few hundred dollars more to try it again, because it always SEEMS possible to make it work. Just look at any chart and you can see exactly where to buy and sell, right? Only a few hard-heads are willing to do the work, endure the heartache and humbling the human nature and are willing to take truth unto themselves and kill the soul for the spirit to survive in order to persevere. Excluding emotional disorders like gambling addiction, only a few will get back up after losing it all several times. Read the book, Market Wizards, by Jack Schwager; almost all of them lost it all multiple times before becoming a Wizard of trading. Not many people know, and not one single beginner knows that only someone driven to be a trader will be successful. It can't be just about the money, so every single person starts out on the wrong foot.
The primary reason any new business fails is insufficient start-up capital and/or sufficient cash flow. Anything less than $50,000 and you don't have enough room to learn and grow. Most people don't have that kind of spare cash, or even half of that, but they try anyway, don't they? Why? Now we've come full circle. Bill Gates started in his garage. Warren Buffet started as a paperboy, then leased out vending machines.
Why? It is the hunt; the quest for sufficiency.
We are born and bred to be self-sufficient, and trading seems to offer that goal.
- LeighLv 44 years ago
Trading forex is no more risky than any other trading vehicle if you scale back the leverage. Leverage is a killer, especially if you're new. In fact, the Australian Dollar (AUD/USD) is a pretty good proxy for the Dow, and not that much different to trade. The two are highly correlated right now. So the question, to me, is not about forex at all, but about trading in general. We all have the same information, access to the same platforms and indicators, etc. Aside from some obvious drawbacks that we can do nothing about, like being under-funded, I would say most people can't stay in the game long enough to learn the game. None of us like to be wrong, so we place blame elsewhere. There is a real hesitancy to address the real issues of the responsibility of trading. Not many stay in the game long enough to learn that the real issues are not with your trading platform or indicators (there are literally hundreds, if not thousands of workable trading systems and indicators), but rather within the individual. Assuming you learn something first and don't just start trading with abandon, assuming you develop a Trading Plan, use good risk and money management, it is still probable you will fail. We're not talking about a childish approach to trading like most of the reasons given here (we know an ignorant childish person will lose), but rather doing everything in your power to learn to be a trader. The number one reason 90% of traders fail? We're talking about some really smart people that will never become traders -- because trading is 100% psychological. You will think that learning more and working harder will fix it, like in any other J-O-B, but it doesn't work that way in trading. It takes guts as much as brains to adhere to discipline. You go through your entire life being schooled to be correct. In trading you have to throw that out the window quick. Certainty is predicated on a myth. Certainty can never really be had in life. Why? Because certainty can only come into being when the future is fully known. People don’t realize either that all a trader can really hope for is a superb ability to assess the odds of being right. That’s all, and we have to learn to live with that. It is a fruitless activity from which there can be no rest, for it will never end. Paradoxically, peace and clarity of mind can only come into being when one realizes that “certainty” cannot be achieved. Tomorrow can never be known. Otherwise we are inviting a future that is wrought with failure, disappointment, and dismay. Most traders we speak with have learning curves that have cost them between $15,000 and $70,000 and up to two years in time. Most people don't have that much money to lose, or that much time to learn.
- vivekLv 68 years ago
Traders fail in Forex trading due to dependence on third party tips.In everything one do, one earn money because he know how. It needs dedication and discipline.Many get in Forex trading on following reasons:
A lot of free demo accounts where one can try a trade exactly like a live are available. One never invest more than he can afford to lose.There are 3 distinct trading sessions for us to take advantage of in the U.S., Europe, and Asia which allows us to trade on our own schedule and respond to world-wide breaking news.Most forex brokers offer little or no transaction fees, they are compensated through the bid/ask spread of each currency pair. It is easier to analyze the inner workings of the Forex market and figure out what is driving it.It is generally much easier to trade a strongly trending market than a chaotic and consolidating market.As an inherent feature of the structure of the forex market it is equally easy to buy or sell at anytime and there is never any increased fee for selling short.One can effectively control his risk even if not starting with much money.
- 8 years ago
FX trading is 24 hr market, so people know that they don't need to give up their day jobs. Platforms are fast and online and are 'free'. Platforms now come with programming environments built-in. It appeasl to the number crunching nerds and developers out there in a big way.
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- exactdukeLv 78 years ago
Because as WC Fields once said - "there's a ****** born every minute".
- 8 years ago
pretty much the same reason people go to casinos.
they love risk and aren't good at math or reasoning.
- 8 years ago
They are all trying to make a quick buck and they are naive to think they can. :D Lets face it its pretty much gambling.Source(s): me