Thursday, December 11, 2008

Top 3 Reasons Why People Fail to Make Money Trading Forex

There are just so many struggling traders out there that can't seem to make money trading forex. If you haven't heard the famous statistic, here it is: 95% of forex traders lose money. It's sad but its true. Let's take a look at some of the things that they are doing wrong. Here are the top 3 reasons why they are losing money:

1) Fear and Greed: This is just another way of saying they can't control their emotions when they are trading. They either fall apart if a trade goes 10 pips against them or they are so greedy that they don't know when to close a trade and take their profits. Both of them are a recipe for disaster when it comes to trading.

2) Relying on too many bells and whistles: There is so much useless trading software being sold online nowadays. I suppose there is a reason for it. People are buying them. But that doesn't mean that they are helping (remember the 95%). For some reason, too many traders feel that the only way to make money trading forex (or any market for that matter) is if they have these overpriced thousand dollar platforms.

3) They never take the time to truly learn the market: This is a continuation on #2. Traders never take the time to truly understand what the market is all about. They would much prefer the cliff notes version, which is usually these thousand dollar software packages. The truth is there are A LOT of traders who are making money with simple bar charts on free trading platforms. (It's not as hard as you may think).

John Templeton has been a successful forex trader after learning how to trade price action. Once he understood that all he needed to trade forex was on a plain chart with no indicators, his profits soared. In his new forex trading course, Trading In The Buff, John explains in detail about this classic trading method.

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