Like many high-performance endeavors, success in forex trading takes time, patience, and a lot of practice. Many beginners don’t last very long in the forex market – not necessarily because they deduce losses that are impossible to recover from, but because they make a few losses in the beginning and give up. The fact is, quitters never win and winners never quit. It isn’t easy to become a successful, profitable forex trader, but anyone can become one by taking a professional approach to forex trading.
One of the primary reasons so many traders get burnt out and eventually want to give up trading or do actually give up is simply because they are trying to get rich quick. Obviously, trying to get rich quick in trading means you are probably doing almost everything wrong. It means you are probably trading too frequently and risking too much per trade, which are two things that quickly lead to a lot of lost money as well as frustration and mental anguish.
You have tried just about everything and nothing seems to work. Quitting seems like the only reasonable choice to make. However, more often than not, this is the exact period where you learn some of the most important lessons as a forex trader. Because of expensive losses, you are likely to re-access your trading approach with a more realistic goal in mind. When this happens, the sense of urgency to make quick bucks diminishes, and hence the ability to make more rational trading decisions increases, often along with a stronger focus on money and risk management.
The determining factor in one’s success or failure in the market is always their own mind. Anyone will get burnt out and want to give up if they don’t have the right trading method, mindset and money management approach. When you feel frustrated and ready to give up on trading, just remember that it is not the ‘end of the world’. Take a big step back and remove yourself from live trading for a while to get back on track. Reassess your trading method and make sure you like the method and it is not overly-complicated and that it makes sense to you. All you need is a method that gives you an edge that provides slightly more than a 50/50 chance over series of trades.
There is not one person in this business who a one time or another, either wanted to quit or did so. The most common reason is a loss, or a string of losses, but also stress and lack of progress. Before you quit, ask yourself what went wrong? Was it the strategy, a lack of one, over-leveraging, over trading, not sticking to a trading plan, changing strategies too often? Perhaps it was a lack of education or simply unrealistic expectations? Trading is no different than any other endeavor in life – it takes time to become good at it. It can be very fulfilling, lucrative and satisfactory in more ways than one, providing that the trader put enough work into it.
FAQs
Like many high-performance endeavors, success in forex trading takes time, patience, and a lot of practice. Many beginners don't last very long in the forex market – not necessarily because they deduce losses that are impossible to recover from, but because they make a few losses in the beginning and give up.
When should I quit forex trading? ›
When is it time to quit trading live? If you are not consistently profitable, and your wins and losses are both the result of chance, or your system is not working, it is definitely time to quit trading with real money, but it is not necessarily time to quit trading FX altogether.
What percentage of forex traders quit? ›
Research shows that 70% to 80% of beginner forex traders lose money and quit. Additionally, 80% of all-day traders quit within the first two years.
Why do so many people fail in forex? ›
Lack of Discipline
Successful forex trading requires discipline and adherence to a well-defined trading plan. However, many traders fail to develop or stick to a trading plan. They may deviate from their strategies, chase after quick profits, or make impulsive trades based on short-term market fluctuations.
Why do 95% of forex traders lose money? ›
Insufficient Education and Knowledge: Many traders plunge into the market without a solid grasp of its nuances. This lack of understanding leads to impulsive decision-making and substantial financial losses. Comprehensive education is the bedrock upon which successful trading stands.
Why is forex very risky? ›
Forex is considered riskier than stocks due to how volatile the market is and the fact it comes with much higher levels of leverage. However, a suitable risk management strategy can help to manage the adverse effects of the market. how to manage trading risks.
How do you know when to exit a forex trade? ›
6 Forex Exit Indicators: When to Exit Your Trade and Take a Profit
- Average True Range. The average true range or ATR measures volatility by taking into account any gaps present in the price movement. ...
- Stop Limit. ...
- Scaling Exit. ...
- Moving Average Stop. ...
- Relative Strength Indicator. ...
- Pivot Points.
If you can't meet your daily lifestyle, your day-to-day living, or you're in debt, you should quit trading immediately. This is one of the major signs when to stop trading. Trading is not like a job that pays you a fixed income where there's a fixed payout every month, it doesn't work that way.
How long do you stay in a forex trade? ›
In the forex market, a trader can hold a position for as long as a few minutes to a few years. Depending on the goal, a trader can take a position based on the fundamental economic trends in one country versus another.
Why do 90% of traders lose? ›
The emotional aspect of trading often leads to irrational decisions like panic selling. When the market moves unfavourably, many traders, especially those who are inexperienced, tend to panic and exit their positions hastily. This panic selling often occurs at the worst possible time, leading to significant losses.
Understanding the Rule of 90
According to this rule, 90% of novice traders will experience significant losses within their first 90 days of trading, ultimately wiping out 90% of their initial capital.
When not to trade forex? ›
Read on to learn the best and worst times to trade Forex.
- Immediately Before or After High-Impact News. As traders, volatility is what makes us money. ...
- The First and Last Day of the Week. ...
- When You Aren't in the Right Mental State. ...
- 3 Candlestick Patterns You Need to Use in 2024.
Forex scam risk involves the danger of engaging with fraudulent brokers or falling victim to investment scams promising unrealistic returns. These scams can lead to significant financial losses and erode trust in the Forex trading environment.
Is forex hard to make a living off? ›
Forex trading may make you rich if you are a hedge fund with deep pockets or an unusually skilled currency trader. But for the average retail trader, what is often promoted as an easy road to riches, can quickly become a rocky highway to enormous losses and potential penury.
Can I lose all my money in forex trading? ›
Yes it's true I blow out few accounts before I become profitable in Forex :) Actually numbers are following: 70% -75% of people lose money in their first year of trading! Other 20–25 % lose money in next 5 years! And only 3–5% of all traders are profitable or not losing money.
Why you should not trade forex? ›
Forex moves around a lot even within very short periods of time. There are significant investment risks as currency fluctuations may move against you, causing you to lose money.
What is bad about forex trading? ›
With no control over macroeconomic and geopolitical developments, one can easily suffer huge losses in the highly volatile forex market. If things go wrong with a particular stock, shareholders can put pressure on management to initiate required changes, and they can alternatively approach regulators.
Why Forex Trading is not for everyone? ›
Leverage, rapid changes in market conditions, and high volatility can all contribute to the high-risk nature of forex trading. In the foreign exchange market, it is possible to achieve substantial profits; however, such gains are not without risk, particularly when employing leverage.
When should you not trade forex? ›
Traders usually try to avoid trading Forex on the weekends. Across the world people are taking the weekends off and this means trading volume is at its lowest on Saturday and Sunday. A low volume typically means tough deals and bad forex trading.
