Causes of losses on Forex.

When you read advertising calls for trading on Forex, everything seems quite simple, buy cheaper, sell more expensive and the profit is in your pocket, and the more leverage you take, the more you earn.

But in reality, statistics say that only 5 out of 100 novice traders make a profit, and according to my personal statistics, even less.

What are the reasons for losses on Forex, why does someone earn millions, while others lose their deposit on the first day of trading?

One can talk endlessly about the extensive experience of real trading and a huge store of knowledge, but as practice shows, the main causes of losses on Forex are most often:

1. Lack of analysis - launched the trader’s terminal , concluded that the price seems to be rising and forward.

As a result, a correction occurred in place of the main trend, and the transaction was closed with a loss. 2. Fear of pullbacks - the Forex trend moves against the main trend 70% of the time, you open a trade in the right direction, but the price suddenly turns around and starts going against you.

The deal was closed with a loss, and the exchange rate went in the right direction again. The reason for failure in this case lies in fear and impatience; in order to have an idea of ​​the dynamics of the trend, you need to evaluate the history of its movement. 3. Impulsive movements - as soon as you see a sharp jump in price, you immediately want to open a trade in the direction of its movement.

But in most cases, such sharp jumps always end in no less significant pullbacks. Therefore, you should never rush to enter the market; it is better to miss a trade and lose possible profits than to suffer losses.

4. Use of advisors - surprisingly, it is trading robots that often lead to the loss of most of the deposit, the reasons for this are the complete lack of control of such scripts. Therefore, if you decide to use automated advisors, then at least do not leave them unattended.

5. Broker fraud - unfortunately, this option also happens, especially if you trade amounts exceeding $1,000. Therefore, for work, use dealing centers that have already proven themselves and have a decent reputation.

6. Equipment failure - we all know that any equipment tends to fail, our computers and the software installed on them are no exception.

In this case, an additional trader’s terminal and setting the same stop loss will help to avoid significant losses. Moreover, these are not all the possible reasons why you can lose your money on Forex; among other things, a trend reversal or some other surprise can always happen.