In this post, we’re going to learn about how a forest trailer wipes out the account in a day or maybe in a week. The main reason behind Forex Trader’s wipe account is that most traders don’t follow a rule and regulations properly in the market.
If every trader follows market rules regularly, they can earn too much money in the Forex market. We know as well that the market has no emotion and the market doesn’t know who has how much capital. Only traders know I have $10,000 in capital, but the market doesn’t know so it is your responsibility how you can save your capital to wipe out.
Let me tell you all the most common mistakes that traders have made to wipe out their accounts. I know this post will teach you a lesson to bring more knowledge to you while you do trading you know the Forex market. After reading that post you will trade consciously and carefully.
Table of Contents
Most forex traders don’t do paperwork.
Many traders don’t do paperwork before jumping into the market. Paperwork refers to the plan before trade in the market. Paperwork has how to deal with the market and which sector traders going to trade. If the traders have no idea which sector is beneficial for them then maybe they can bear the loss.
Paperwork is planned before trade in the market. I see many traders who don’t do paperwork and follow it to understand market prospects in the market. If you also belong to that category, you may be profitable in the market.
It is not necessary you do paperwork only for forex trading you can do paperwork in any business. I did the time paperwork. If you have any idea in your mind and you write it down on paper then you can improve it, and you will start thinking about it. It’s helpful for everyone like the Investor, the trader, and the common man.
Now main point is that many traders do paperwork in their initial time after getting some knowledge they forget to do paperwork and start thinking I’m the master, I’m invisible, and I’m unstable. But they forget the market is superior to all of them. So I suggest to everyone please do paperwork before trading or investing for good guidelines.
Many Forex traders do Overtrade
Sometimes we see in the forex markets there are a lot of traders who trade without Patience and setup. If traders place trade without setup or patience may be quite risky and there are chance of bearing a huge loss.
If a trader books some loss from the market and the trader is newly landed here then his mind works like a pro and cries loudly I can cover that loss and I can make a profit from the market. The market has made for me. I’m the king of the market. Every chart pattern works for me even beaish chart pattern or bullish chart pattern.
Meanwhile, he forgets that he is doing overtrade not a trade. That’s not a good deal for him he is just working for his broker. Overtrading is beneficial only for brokers not for traders. Spouse you have been trading after loss and trying to cover your loss but in the mid-journey you have placed more than twenty orders buy side or twenty on the selling side.
Now the point is you completed around twenty orders and you have given the commission for every trade of around six cents. What you earn may be nothing, so you must keep in mind overtrading is beneficial for brokers not for traders.
Some traders do trade without stop loss
In my trading journey, I have seen many traders who do not use stop loss while trading this is one of the main reasons to wipe out their capital. Trading is too risky when you are not using your proper stop loss.
While trading many traders think I have taken up overall capital on risk to get a successful trade. In the market no one like hunting stop loss, because sometimes the market comes on their stop loss level hit and moves back. So that’s why many traders are irritated and stop using the stop loss.
I see only Newbi trader don’t use stop loss because their initial time they have enough money to trade. After spending some time in the market and losing money they got a lesson and started using stop loss.
Stop loss in forex trading is crucial. Because in the news momentum market has no direction and moves unpredictably. If you have proper knowledge about price action and you are strict on your rules and regulations or use proper stop loss then you are a master in trading or you will be the next successful trader.
Lack of knowledge
Some traders do have not proper knowledge of how to trade in the forex market, and how to deal with the market, the forex market is profitable. In my view, many traders don’t want to learn how the market works. They just follow other people in the market to earn profit.
In the market, If you don’t have proper knowledge in forex trading then there are chance you will wipe wipeout your account soon.
If you don’t have notice about how to read charts and how to do technical analysis and fundamental analysis in the market it’s me you don’t have proper knowledge about the market. The market is like only those types of traders who have the proper knowledge to drive the market.
lack of consistency
It refers to working regularly in particular in one script. If you follow one script on a regular basis then you have a lot many knowledge about this one script. The spouse you are following the USDXAU script on a regular basis. After spending some time you will get many of knowledge about these scrips like their movements, rising or falling, news, and events.
But on the other hand, many traders just watch the chart and do nothing. That is not a good deal for everyone. If we see a chart of script after a long time or switching in some time then we can lose our consistency.
If you are fully master in knowledge but you are working continually on your skill then you will lose the knowledge that you gained last time. In the market If you think about I’m master
They have poor risk-reward management
You know this is the key to success in the market. If you are following proper risk-to-reward and even if your risk and reward ratio is not good then maybe you will survive in that business. If I talk about any business in this era. It’s not a success if proportion has not followed the risk by management.
In forex trading, many traders don’t know what is the risk-reward ratio and how to prepare and follow it. Traders must recognise the areas where risk rewards are too poor and need improvement.
Some forex traders take unnecessary risks without measuring or knowing what is risk behind a trade. They focus on their reward. If something happens wrong with that trader while trading they forget about their risk-reward ratio and start taking trade to cover up.
Many traders are pro traders they know how to trade with risk management if traders have found any kind of risk then they try to mitigate risks on behalf of the study.
Forex trading is not the cup of tea for everyone
Forex trading is not made for everyone. I see many trader who have given up in the middle and most wiped out their capital. But the question is arising now is it hard, It is not made for everyone. Is there no one who can earn money? Those questions are totally mythical. If you put too much effort into learning and gather a lot of knowledge related to trading then you can easily make money from the market.
I See many traders who are consistently earning money because they have made a lot of effort to learn. And they have turned day and night into one for getting success in the market. Have you done like that maybe some trades have not. So that’s why here the ratio is high only less than ten per cent out of a hundred are successful.
Why it is hard for every person who has jumped into this market? Let me tell you that thing if you have recently jumped in this one then you must have seen hundreds of charts every day and thousands of charts in the month. If you are habitual in watching charts then there are chance you will be a successful trader in one day.
Some traders don’t like to watch charts on a regular basis and take shortcuts like using indicators, taking tips form others, and following someone for the fast lane. But I tell you one thing if you take the long way to learn then you will also wonder a lot of strategies and techniques for how the market works. If you go with a short lane then you miss all of these things.
Avayah Kaur