7 Reasons Forex Traders Fail

Do you find it tough to turn a profit while trading foreign currency? What happened with the FX market? Interested in learning why you keep suffering financial losses in the forex market? 

If that’s the case, we strongly suggest reading on for a comprehensive breakdown of Forex professionals’ most common causes of trading failure.

Seeing why you keep failing at something might be challenging until someone points out the obvious. Achieving success in any endeavor necessitates, first and foremost, an awareness of the issues at hand. It can then be met with an appropriate response.

To increase your chances of joining the elite group of successful forex traders, consider the following list of frequent pitfalls and how to avoid them: Also, always follow the latest forex trading news and be at the top of the game! 

They Despise the Trading Process

Expertise is a process motivated by the genuine desire to learn and do better. Traders would likely not invest time and effort into developing their skills without some interest in or passion for what they do.

Market analysis and the long hours necessary to become a successful trader might feel like a job if traders don’t enjoy trading. This explains why most would-be traders ultimately decide to pursue other careers.

Technical Analysis that is Sloppy or Wrong

One possible explanation for the high failure rate among forex traders is sloppy technical analysis. Technical analysis is a crucial tool for traders to predict the future direction of a market better and when that direction can occur.

The difference between a profitable and unsuccessful investment could be as simple as forgetting one crucial structure.

Low Initial Funding

Most people get their feet wet in the forex market because they are desperate to either pay off their debts or generate quick money. Forex marketers frequently advocate trading substantial lot sizes and high leverage to achieve significant profits on modest capital outlays.

The adage goes, “If you don’t have any money, you won’t have any time,” however it is feasible to achieve exceptional returns on modest investments in the near term. But suppose you have a limited amount of capital and are exposed to excessive risk due to high leverage. In that case, you are likely to make rash decisions at the worst moments as you react emotionally to the ups and downs of the market.

Compulsive Investing

A further factor contributing to Forex traders’ common failure is an addiction to trading. They engage in price-chasing behavior, which professional traders in the financial industry never do. 

Trading foreign exchange may be a thrilling experience. The market may produce high adrenaline levels due to its short trading periods and highly volatile currency pairs. In addition, it can be a significant source of anxiety if the market changes course.

The antithesis of this strategy is “chasing the price,” which entails making and closing trades on a whim rather than following a predetermined plan. 

Some investors may wish otherwise, but they have little impact on market conditions. Sometimes, only a certain amount can be taken out of the market.

Not Taking into Account the Bigger Picture

Forgetting the longer time frame is a major mistake that can lead to failure in forex trading. You can raise your consistency by a substantial margin by including the longer-term trend in your analysis of whether to purchase or sell an asset.

Not Taking Risks Seriously

As in other walks of life, proper risk management is essential for a successful forex trading career. Poor risk management might wipe you out even if you’re an expert trader. Your primary responsibility should not be to maximize profits but to secure the resources already in your possession. The sooner you exhaust your capital, the sooner your earning potential will vanish.

You may protect yourself from this risk and practice sound risk management by setting stop-loss orders and repositioning them once you’ve made a decent profit. Make sure the lot sizes you’re using are sensible in relation to your trading account’s funds. Most importantly, exit a trade if it no longer makes sense.

Stop Levels in Low-Likelihood Spots

We want to know where others are setting their stop-loss and take-profit levels in relation to this subject. Depending on the direction of the trend, a stop loss should be placed either below or above the structure. 

If the market is trending upwards, a good position to put your stop loss is a few pips below the previous low, and if it’s trending downwards, your stop loss should be above the last swing high. Before resuming the primary trend, the price may retrace to the previous swing, high or low.

It’s important to note that the primary trend is still in effect unless the prior high/low is broken. However, the optimal spot to cash in your winnings is when the initial impulsive move bottomed out at the previous swing, high or low. Since this could alter your risk-to-reward ratio, setting your take profit at twice the size of your stop loss is recommended.


Accepting that you have little power over the outcome of your transactions is essential if you want to achieve consistent profits. The most common causes of trading losses can be avoided if we learn from past mistakes. So, we can adjust your actions and outlook before approaching the wall of failure.


Adil Husnain

Adil Husnain is a well-known name in the blogging and SEO industry. He is known for his extensive knowledge and expertise in the field, and has helped numerous businesses and individuals to improve their online visibility and traffic. He writes on business, technology, finance, marketing, and cryptocurrency related trends. He is passionate about sharing his knowledge and helping others to grow their online businesses.