Justifications for losing money in trading

Justifications for losing money in trading

It has become a trend that naïve traders lose money in trading but you shouldn’t let it happen to you. Most naïve traders have the habit of following the crowd which is wrong. When you follow the heard you would also repeat the same mistake that everyone else does. On the other side of the market, there are traders who make constant money like UK traders. Why do you think that there’s income disparity? There are many justifications for this income disparity between traders although most naïve traders fail to understand it. Perhaps the common issue can be having no self-control. Usually, the rookie traders are spotted with less self-control. They even try to revenge the market, is it even possible? Or they trade as if the market will not be there tomorrow and all these behavior leads to ugly loss. Another justification for losing money is trading against the trend, of course, there are traders who trade against the trend but they have been in the market for quite some time. They know to deal even if they trade against the trend. However, being someone who is new to the market it is stupid if you try to trade for against the trend. You should be able to handle trend in order to trade against it. Nevertheless, let us get to know more details.

Not accepting the truth

Being a human it is obvious for us to run away from responsibilities. We don’t even want to accept the truth, we try to pass on the mistake to another. Pointing another person has become a tendency. So it is the same with Forex trading as well. The ones who enter the market newly, they think or the force themselves think that it is the market’s fault that they are making losses. Well, here is the truth. If you are making losses, it is your fault no one else’s. If you are facing losses the broker has nothing to do with that. It is basically, you and your performance in the market. There’s no third party that you could put the blame on. If you want to blame someone, it should be you. This reality might hit you hard but it is the truth. Even if you blame someone it wouldn’t help you become an expert. If you learn to accept the truth you may at least try to find methods to avoid losses.

Ignoring the fundamental factors

Many traders often ignore the fundamental factors of the market. They always take huge risk after finding a good technical setup and loses money. But this is not the proper way to trade the market. You have to understand fundamental factors are the most powerful price driving catalyst. So when you are trading CFDs, you have to assess the fundamental data. Your trading strategy must incorporate with the latest market change or else you will lose tons of money. Always follow the conservative trading strategy and trade with small lots to reduce the risk factors. Never trade with gut feelings as it will increase your risk.

Not trading with greed

‘Greed’ is one of the reasons why traders lose money in trading. They trade as if the market will vanish tomorrow but this is not at all healthy. When a trader trade with greed he will face losses as well as the inability to move forward in trading. He may also bear higher costs related to trading. This should be something that the trader should completely get rid of.

Do not risk extravagantly

How much can you risk? Are you comfortable risking that particular amount? If you are not comfortable you shouldn’t do it. This is one of the common behavior that we can see among naïve traders. Even if you have capital don’t try to guess-trade, take time and analyze. Decide twice before risking the money.