Psychological reasons for losing funds in Forex

Most beginners who want to make money in forex trading start their journey by losing their deposit. And on how correctly the trader will react to failures, his further trading results will largely depend. Loss of a deposit occurs under the influence of a number of factors. Among them, psychological reasons occupy a special place . I want to talk about them in this article.

To begin with, I would like to note that the psychological state of a trader during trading changes as they gain experience in trading. The entire trader’s path can be conventionally divided into three stages. Each of them corresponds to a certain emotional background. The first stage usually lasts several months. During this period, a novice trader is very happy with profitable trades and enters a depressive state after receiving losses. The second stage can last for several years. The emotional component is no longer manifested so actively. The trader begins to relate to both profit and loss relatively calmly. After this comes the third stage. A trader who reaches it reacts to what is happening in the market without any emotional coloring. The psychological causes of losses cease to work. But those who are just starting to trade on the market need to know about them,

The main psychological reasons for draining a deposit

Some novice traders believe that there is nothing difficult in such a way of earning money as trading on Forex. You just need to open buy and sell deals. This attitude initially leads to a loss of funds. The only question is how quickly it will happen. From the first days of entering the market, one must understand that this option for generating income requires knowledge and experience. This means that it will take a long time to achieve success.

The next common mistake is trading intuition. The trader opens a buy trade because it seems to him that the price will go up. Perhaps, such a trader will be lucky for some time. But then all funds will surely be lost. Having a tested trading strategy is one of the basic conditions for profitable trading. Moreover, the trader is obliged to strictly follow the rules for opening, maintaining and closing trading positions, which are provided for in the applied TS.

Sometimes traders use a strategy without first testing it on a history and demo account, which can also lead to a loss of money. Some market newbies take the advice and advice of experienced traders too seriously. Based on their predictions, traders begin to make changes to the trading system. As a rule, this does not lead to anything good.

Of course, the psychological reasons for losses, which I told you about today, do not reflect all possible problems in trading. But even if you take these points into account in your trading, its results will improve.