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Why am I losing money in forex trading?

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Hello there.

Are you losing money in forex? Do you hear claims of successes in forex trading while all you can do is to ask yourself why are you losing in forex? Allow me to share with you why perhaps this is happening to you.

When I was a new forex trader, I knew nothing about proper money management. As time passes, I came to realize that this is one of the if not the most important factor in forex trading. The idea goes like this : risking a total of 2% at anytime for your forex trading will allow you allowance for making mistakes and learning from it. Trust me when I say that mistakes are aplenty in forex. If you risk 20% per trade, all it takes are a few mistakes and margin call will pay a visit.

So are you having proper money management ?

Another common reason for losing money in forex trading is the lack of control. Do you have an urge to be constantly trading? I did. The moment you close a trade, you scan furiously the charts in an effort to find a new trading opportunity. Now when a trade closes due to a take profit or stop loss, it means that the situation needs to be evaluated. The market will always be there and you would rather miss an opportunity which does not costs you money than to enter a wrong trade and lose money!

So do you find yourself over trading?

Lastly, are you aware of the general market fundamentals or sentiments? I used to enter a trade happily bent on riding that bullish tread only to find the price action becoming spiky and reversing on me and thus taking out my trade. Only then did I realize that it was the US Non-Farm Payroll and there were strong speculations of a disappointing data. Forex trading is not an easy task. Do you read up on financial news or come to TheGeekKnows ( Bookmark us now 🙂 ) for an overview of sentiments? It is also good to have discussions with fellow forex traders over at our forum on upcoming events and sentiments so that possibility of any unexpected price action is reduced.

So are you aware of the happenings of the financial markets?

Trade safely.

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