The foreign exchange market is the biggest and the most liquid financial market in the globe. Even though there are several participants in this market, only few of them laugh all the way to the bank. In fact, statistics sadly point out that 90 per cent of Forex traders fail to succeed in this business.

Forex traders mainly lose money because of similar reasons that other investors in other asset categories encounter. Here are some of them:

Failing to trade with discipline

The biggest mistake traders usually make is risking too much of their cash and over trading. This lack of discipline in Forex trading is perhaps the most prevalent problem facing both novice and professional traders. Because of these problems, most Forex traders end up allowing emotions to control their trading decisions. Succeeding in the business of trading currencies requires one to develop patience and confidence. In as much as one may experience many smaller losses, engaging in queer trading habits is not the way to success. Maintaining trading discipline through executing orders based on a well-constructed trading plan is the only way to be in that elusive 10 per cent of winning traders.

Failing to develop a proper trading plan

A good commander cannot attempt to go to war minus a plan; neither should any person attempt to navigate the scary Forex waters minus a well-constructed trading plan. Success in Forex trading requires following a trading strategy that clearly stipulates risk management rules and the expected return on investment (ROI). As such, keeping to a trading plan will enable you maximize on profitable trades.

Failing to hone skills in a demo account

Many currency traders jump into opening live accounts before adequately practicing their strategies in a demo account. As a result, they go into the market with half-baked systems that are unable to withstand the scary waters of the Forex market. Success in Forex trading requires adequate practice in a demo account so as to develop discipline, consistency, and ability to trade within an established plan.

Failing to have realistic expectations

Regardless of what everyone says out there, currency trading is not a get-rich-quick scheme. Success in this business requires hard work, just as success in any other business. However, most traders enter the Forex market and compel it to work in their favor while abandoning risk and money management rules. As a result, they leave Forex trading more disappointed than they came