Dr. Jason Gospodarek has been actively trading in the forex market mentoring traders, creating forex courses, promoting websites and working with brokers, he’s seen a lot of why forex traders fail. Jason shares why they fail and how you can avoid the same mistakes.
“Don’t bet the farm on one trade…Risk what you are comfortable risking” – Dr. Jason Gospodarek
Overleveraging the Account
Most traders he’s met have overleveraged accounts. There are brokers that give you 1000:1 leverage, 3000:1, 5000:1 and even 100:1 leverage is too much for most traders, especially when they are starting out. This is the main reason forex traders fail.
“Stick to your plan. You should always have a target.” – Dr. Jason Gospodarek
Using too much risk and too much margin on your account is a key to failures in your endeavors. The forex market is open 24 hours, 5 ½ days a week so don’t bet the farm on one trade, one day, one week or even month.
Early Profit Taking – Why Forex Traders Fail
Risking too much to make too little. Trader “X” was a good trader but he could not let the trade run to the target. If he had a 50 PIP stop on a trade and 100 PIP take profit, he would get into 30 PIP’s of profit and he would want to change his stops and take profit right away. This leads to lots of smaller wins but larger losers. Don’t get too excited when you’re in profit. Stick to your plan. You should always have a target set.
Blindly Following Others
When you’re on the internet, you have no idea if someone has been trading full time for decades or if they just started a month ago. Anyone can get a beautiful website these days and get all the software and apps to make it seem like they have a successful business and a successful trading record.
Always study someone you’re learning from. If you’re looking for someone to actually trade for you or trade your funds, make sure and see a live account. Demo accounts don’t mean a lot in the forex marketplace. Always ask for a live account record from a third party vendor like FX Blue, Myfxbook there are a lot of them out there. See if they really are who they say they are.
To hear the rest of why forex traders fail, download and listen to the episode!
Connect with Jason Gospodarek:
Don’t forget to subscribe and leave a positive rating and review on iTunes if you enjoyed Why Forex Traders Fail. Thank you for tuning in to The Forex Warrior podcast!