Essay on Money that is losing trades

It is a common fact that despite all the available information and knowledge, still most of the traders are not able to succeed in the trading business, and they lose their money. It has been said that when it comes to Forex trading, the majority of traders make several mistakes, and they invest money in a way that they only get losing trades in the end, leading to their ultimate failure. So, they leave the field of trading, because they think that they cannot take any successful steps. It is important for traders to understand why they lose money, and how they use their money that leads to losing trade. It is critical for traders to understand that money should be invested by keeping certain things in mind, and they should take care of certain things, otherwise, they will end up on the losing side. This is what happens with the majority of traders. So, the question is, what should they do? And the simple answer is that they should keep certain ideas in mind to avoid losing trade. They should identify reasons, which are playing part in his failure or losing trade. Once a trader will be able to look at those things, then the process would become easier for him/her to make good returns. It is not something impossible to achieve, rather a little wisdom, knowledge and thought process is involved.

The first thing that traders should keep in their minds is that they should never try to beat the market. Remember, the market is something way broader than your expectation, and if you want to have success in the market, then understand the different dynamics of the market, and define different trends, which lead to a better path. If you are going with a mindset that you will beat the market, then your failure is an obvious result to happen. No one has ever beaten the market, because the market itself is something, which is way beyond the reach of a trader. You can take so many benefits from the market, but you can’t beat it. The second most important reason which plays its part in losing trades is that start-up capital is low by the trader. The mistake made by the traders is that they invest a smaller capital with the expectations of high returns. In short term perspective, they may achieve it, but they may get it once or twice. In long term perspective, they cannot continue to do so, and this strategy is leading them to a complete disaster because they will end up losing all the money.

One of the most important things in trading is risk management, and this is where most of the trader gets it all wrong. They tend to make decisions, which do not have the capacity to manage risks accordingly, so they ultimately lose their trade in the market. If you want to survive in the trading market, then risk management is the most essential thing to have. There can be a situation that you are a great trader with good enough information to win the market, but when it comes to make decisions regarding risk management, you don’t have any skills, and this is where things start to go in the wrong direction. In trading, earning profit is not the ultimate goal, rather the real objective should also be to protect, what you have earned. You should know when risks are looming around, and what you have to do in such situations to remain safe from any disaster. Some other traders lose their trade because they become greedy. They want to get every possible penny from the market and squeeze it as much as possible. Such a greedy plan never works in the end, and traders get failed.

You may lose your trade and money because you are always confused about the future course of action. An indecisive trading mind can never prosper in the trading market. People are not able to make considerable decisions, and lose the whole plot. For example, there can be a situation, where a trader invested some amount in trade, and they see that things are not going well in the beginning, so they retract immediately. This is not the right approach to find the right direction, because once you have entered the market, and then give some time for things to happen. Success never comes overnight, and it always takes time. The other considerable reason, which plays its part in losing trade, is the fact that the traders are not ready to accept their mistakes. We have seen various instances, where a trader has made a mistake and taken a wrong direction, but he/she is not ready to admit his/her mistake. If you cannot accept your mistakes, then you stop learning at that particular moment. Mistakes are not bad to make, if you take them seriously, and learn from those previous mistakes so that mistakes are not repeated in the future.

There have been more surprising facts to reveal why most of the traders lose the game in the trading market. A lot of reasons for losing trades have been mentioned earlier, and few more can also be emphasized for traders to know, what they have to avoid in the trading market. The first major thing is that the majority of traders enter into the trading market with an expectation of making quick profits. They come here with some dreams in mind and think that trading will help them to get rich in no time. It is absolutely a false perception amongst the majority of traders because there is no short cut to achieve big dreams. It has been observed in different surveys that around 40% of traders stay in the market for around one month, and they quite in the essence of disappointment. If someone, goes for more than one month and tries to stay firm in the market, but 80% of them lose their patience in 2 years' time. It is quite shocking to know that only 7% of traders remain in the market for more than 5 years. It shows how traders come up with wrong perceptions and expectations, and get disappointed so early and leave the field open for those, who are here to stay for the long term. Trading is not the game of emotions or idealism, rather it is a proper field, which needs high IQ level, research, analysis, as well as, ability to understand different methods. One cannot come and conquer the trading market. You have to be wise, careful, decisive, risk-taker, and patient, otherwise, your money is going to lose the trades.