Learn more from these 10 Reasons Why the 95% Forex Traders in Zambia fail To Make Money but end up making losses and then giving up and call Forex trading in Zambia a scam.
I wrote this post based on my own experience with the losses use to make and the experience of other forex traders in Zambia I knew and taught some. But this post does not only apply to Zambians but to everyone is a forex trader. In my previous post, I mentioned that up-to 95% of forex traders make losses and only the 5% succeed.
We’ve all heard the cliché statistic that forex traders do not make money from something like 80 to 90 per cent. You can learn more about this by reading this post on how brokers make profit and losses.
10 Reasons why the 95% of forex traders make losses all the time.
1. No practicing with demo account in Forex Trading in Zambia
Why is demo-trading not a problem first? Well, for one thing, you’ve got to learn how the trading platform you ‘re using works, before you try to get into it. You should not knowingly want to risk money simply because you didn’t completely appreciate how the trading process functions.
Next, trading in a live account without demo first is a recipe to lose money, before you actually learned how to trade your method. You need to have the screen time and get some ‘runs on the board’ as well as some consistency before you commit to the market risk of real capital.
However, I do not advocate wasting too much time on demo trading, 1 to 3 months is the perfect time after you’ve mastered a forex strategy that works for you. But of course, before you can try to trade in a real account, you need to understand master your system of trading to get to know it. That will help you avoid unnecessarily losing money.
Or of course, actual / live trading would be the best lesson of all, because there are emotions of putting real money on the table, but that doesn’t mean that you can jump into it without any experience.
Solution: Open a demo Forex trading account in Zambia
You can get my Demo Trading Account recommended.
You need to treat the demo account as if it hard real money, even though it is not. You first need to drain the demo account from $10,000 to an amount you would be able to deposit in real account like $100 and grow the $100 demo. The more you treat the demo account as if it were real, the easier your transition will be when you move to a live account eventually.
2 Forex traders in Zambia make Forex a complicated thing
A major reason so many forex traders struggle to make profits is that the trading process is overcomplicated. Yes , people can over-complicate every aspect of trading, from the exact technique they ‘re using and how much they review the charts, and money management, trading is a very easy thing to over-complicate.
Maybe the first thing traders over-complicate, is their charts. It is very common for beginning traders to think about the more indicators they learn and use the better off they are going to be. However, as I discuss in my article on why indicators will destroy your trading account, this couldn’t be further from the truth.
If your charts look messy or dirt because of it having too many indicators, more like abstract modern art than a price chart, then the analysis process is probably over-complicated. If you’re addicted to the lower time frame charts, you ‘re also likely complicating things too. If you’re sitting there for hours staring at your charts or constantly reading economic news, you ‘re over-complicating it too.
Solution: Make Forex a simple thing to do in Zambia
Know, the primary piece of knowledge that we all seek to evaluate and sell is price. So, step one not to over-complicate trade, is not to cover up the most important thing in any market, which is the price action. Before doing something else, you need to delete markers and know how to trade on a stripped-down / naked price chart.
Always, note that incorporating factors, whether they be metrics, news or trends, views of other peoples, or something else, would only over-complicate your mind and, ultimately, your trading cycle. Remember, keep it stupid and simple.
3. Not believing and understanding that Forex losses are part of success.
I am sure you have seen people posting their trading history with no losses, yes that is true, it is possible to win more than 20 trades without making a loss of which I have done that before. But this shoul discourage you when you make a loss. Even forex trading experts make losses too, it is just the matter of having more profits than losses. And is not always that you succeed.
One of the greatest challenges for new traders is realizing that setbacks or losses are part of the trading process, something that sometimes leads them to blow up their balances and give up on them. You need to understand and accept this, as well as plan how you’ll handle losses. Traders also attempt to prevent losses by not using stop losses or hedging, but such acts often result in larger losses and quicker blow-outs from the portfolio. You can’t help but fail trades.
When traders fail they begin to freeze. We see losses as a very bad event and it can be very shocking to see the emotional reactions that we evoke in an investor. A trader may be scared for a while to pick up the next trade and ‘hide’ it, or they may trade too low on the next trade, just to see it win (but a much smaller winner than possible). Traders also tend to feel revenge after a loss, and they perform this revenge by jumping back into the market to try and make back the money they just lost, which of course usually only leads to more losses, thus further cementing the cycle of bad trading habits.
Solution: Understand, accept and plan for losses in your Forex trading in Zambia
The solution to Forex losses is to understand and accept them, and formulate a plan to manage losses / risks.
It’s important to understand that even if your edge is say 80 percent profitable, any trader can be a loser. A win rate of 80 per cent still doesn’t mean you know when the losers of 20 per cent will surface. And you could have 10 losers in one row out of 100 trades, can you do that?? Think about how you’d plan that.
First, knowing the difference between a positive loss and a negative loss is key. Now, perhaps you think, “What the heck is a good loss? ”. A good loss is one that happened as a result of the discipline and patience you traded your edge, it is a loss that had to happen even though you were 100% sure it was gonna be a win. In other words, you’ve taken a trade that fits your trading strategy and trading plan and that just didn’t work out because it was a natural statistical loser. No injury, no foul.
One poor setback, you should have stopped. Typically these are instances of over-trading, or trading when your edge was not present. Those poor or negative losses are, in my experience, the main factor why most traders crash. Most traders trade simply too often, and so they’re gambling in essence. One thing we all know about gambling is that the house usually wins, other traders betting against you will be house in the event. So, always trade if you want to lose your money. You have to work at all costs, to avoid these bad losses.
4. Forex traders in Zambia focus on making more money out of their small capital
When I began trading indices, I had this idea of always turning $10 to $50 or $100, it could work but not every time. I find that most people are so centered on resources, benefits and bonuses that they lose sight of what it means for them to really succeed.
Do you think that in the heat of a game or tournament a professional basketball player or golfer is thinking about the dollar signs and profits? No! But no! I can tell you they are not. They focus solely on the game they love, and they’re passionate about it, and how to perform best. To win a tournament, the golfer has to play every stroke and every hole over several rounds, he doesn’t care about gold. He thinks about the game mechanics, its method, its mentality, etc.
Similarly, if you’re too focused on money, and not on the fundamentals and trading cycle, you ‘re not going to be too long in the markets.
Solution: Focus on the journey, not the destination in Forex trading in Zambia
The solution is to simply realize that you can’t always be thinking about making money to make money trading. The aim of course is to make money, but the path is selling and buying, so you won’t ever make money by properly performing the path. I get messages from beginning traders almost every week asking me how much they can expect to make per month, or how much they should risk, and so on. These are the wrong questions to ask yourself. What they would say is, “How do I tradecorrectly? “How do I remember the charts to read? “And questions like that.
It seems like trading is about betting and money-making, most people don’t want to concentrate on the mechanisms and operation, even without concentrating on certain stuff that you’re never going to produce. You’ve got to be excited about trading, playing, and winning the game, not just making profits.
5. Forex traders in Zambia Do Not learn the daily chart time frame first
Many newbies like to try their hand at day trading. They have every concept of day trading in their heads and they all seem to want to glance at quick time-frame charts until they settle on the regular chart. Who will fault them for this? With all the disinformation out there, it’s easy to start getting hooked to the tick by tick cycle of 1 and 5 minute charts on certain blogs. What you need to know quickly however, is that these time periods are all noise and has millions of people to trade against you.
The true story of the business can only be read on the higher time frames, zooming out and seeing the whole picture. Daily price bars say a whole day of details, and thus bear more weight.
Solution: Analyze and trade only the daily chart at first in Forex trading in Zambia
The alternative to the question of not first having to trade the daily chart is to concentrate more on the time span of the daily chart. I’ve published a number of posts describing why you can deal in longer time frames and I’m not going to mention any of the explanations. Still, it’s enough to suggest, if you don’t grasp the main rates and how to search and sell patterns in the daily map, under the daily chart, you’ll never make money in every time frame.
If you choose to trade intra-day charts, first you need to consider what the regular charts are doing, in terms of patterns and rates, as well as market action. The answer is to both appreciate the value of mastering the regular map and work on it before you master it.
6. Forex traders in Zambia have Poor money management
Bad money management is a massive challenge that is (most actually) dooming many traders before they even allow themselves a chance to get going. The root cause of this problem is both inadequate education / weak awareness about the value of money management, and greed. Many people just don’t want to accept that they can’t risk a lot of money per trade, so they crank up the risk right out of the gate and proceed to lose all their money as soon as possible.
The two greatest money management errors people create are dealing for capital that you can’t afford to lose and investing too much every deal or trade. Another part of this is not knowing how much you can fail emotionally and financially per exchange and still be Fine.
Solution: Understand and plan and have good money management skills in forex trading in Zambia
So, what is the remedy for poor management of the money? Okay, it begins by realizing you can’t gamble capital that you can’t afford to lose. If you are going to use a credit card or a loan to finance your deposit and you don’t have any spare cash to deal with, you’re ruined. If you put more money into your account than you know you’re expected to use, you’re doomed.
When you start, you have to decide whether you even have any money with which to trade. Trading, speculation, is risky, and you have to approach it from the mindset that you could lose the money you’re trading with. I’m not saying you ‘re going to lose it all (if you’re training and disciplined you ‘re not going to lose it all), but I’m saying you ‘re going to have to be mentally OK to lose it all. When we approach trade from this perspective of being OK with losing, we place ourselves in the best position to win, as contradictory as that might seem to you.
The two keys to money management are just investing your budget with capital that you don’t really need, and not losing more than you want to lose per exchange. I advise people you can set the value of your 1R per trade risk so that if you lose 20 straight trade you can always sell the same number.
7. Zambian forex traders Trade too often to make more money faster or to become rich.
At first, my goal was to become rich by with forex trading, so I would spend an entire day trading which is actually gambling and things never worked well for me. The number one account-killer for traders is potentially selling or buying too much or over-trading. For any point almost any exchange has over-traded. Many who found out they’re doing so until it ruins their income, and some that hang around long enough to see any progress. Unfortunately, most don’t find it out or simply can’t resist.
What I’m talking about here is trade when there’s no edge or strategy in there. It is a mistake born of impatience and greed. I realize you want to make money in the markets badly, but I can assure you that more frequently than not investing is not the way you do it. Looking at lower time frames is a major factor for over-trading by traders, too, trading from smartphone phones is a problem also. These things lead to the charts being addicted and this obviously results in over-trading. Over-trading is essentially gambling, and, as I said earlier, the house always wins (that is, the casino, or the broker or other traders, not you).
Solution: avoid Forex over trading
The remedy to over-trading is to slow down all facets of your company. That implies, staring only at the average chart for a moment, not using the computer to trade and just reviewing the charts a handful of times a day for 20 to 30 minutes each. To trade you will take a sniper approach, not a machine-gunner approach. You have to recognize, embrace and operate on the reality that less is better in commerce.
9. Zambian forex traders do not understand market dynamics or how to read price action in Forex trading in Zambia
Clearly, if you don’t grasp how stocks or currencies continue to change and the fundamentals of stock structure / business action, you aren’t going to make money as a investor. But, I regularly read emails from traders who simply do not grasp the simple market conditions and price action of tenants.
Examples of this problem include:
Traders actively trying to swap breakouts. This also leads to defeats as artificial breaks are not understandable.
Not knowing pull-downs – trying to choose peaks and bottoms or join while the business is expanding.
Not knowing on the chart how to interpret the plot. In other words, instead of relying on only one price bar, you ought to look at the whole series of bars, from left to right, and what they’re asking you.
Solution: In Forex trading, Learn and anticipate, don’t just react in Forex trading
The price activity in a market shows essential facts, such as main thresholds and prior price action alerts, case areas and certain items that we would have identified beforehand. Sign these items up ahead of time on the maps because these rates and bits of knowledge will help us on potential trades.
9. Zambian Forex traders do not have daily mantra or routine in Forex trading
If you don’t have a schedule, instead your trade can get haphazard and out of reach. The way in which you handle yourself will contribute to your trading performances. You can’t predict good trading outcomes because you don’t have some sort of continuity with how you treat the markets.
The issue here is that many individuals are not able to know from a coach or someone who is more seasoned than them. We assume then that we should either ‘do it’ or go it alone and ‘work things out’ on their own. What ends up occurring though, is that they don’t have some particular investing technique they’ve perfected, so they’re only staring at the stocks blindly thinking they’ll still be competitive.
Solution: In Forex trading,Learn how to create routine and consistency in Zambia
I’ve got a few articles about my daily routine and how I approach markets. My routine is one that combines life, strategy and spirit. I don’t watch the charts every day. I know what my plan is and I typically glance at the maps in peace and calm, two or three times a day.
10. Forex traders in Zambia Trade without professional training from an experienced forex trader
Trading without professional training, not acquiring real knowledge of trading and failing to master skills before going into the trading battle is a killer for any trader and their account.
It also ceases to mystify me how or why someone thinks they will excel at trading until they AT LEAST have developed a strong market action dependent strategy. I believe everyone wants specialized experience and practical chart reading skills before they can ever expect to get a chance to make money trading. Speculation on the stock market isn’t for the weak-minded, so you just need advice so sound knowledge before you gamble your hard-earned money in the business.
There is no other serious occupation on Earth where people think they can avoid professional training and become successful in some way. If it’s a professional athlete, a scientist, an advocate or something else, they both need specialized preparation.
Solution: Learn from a professional Forex trader in Zambia
As I mentioned above, learning from a professional is vital to the learning of any skill. You should want to have the best chance of succeeding in the market, and that means learning how to trade from someone who has already made all the mistakes you are going to make and can teach you how to avoid them. Using it would save you energy , resources and a massive deal of emotional stress.
In today’s tutorial, my goal was to provide you with some ideas for coping with the most popular causes traders struggle to make profits. Know, when I first began my trading career, I walked the very same route right now, and I too faced several of these problems along the way. It is not enough to be aware of the problem, you really have to consistently implement every solution.