Another reason why 99% of traders fail

In Forex you have all against you: the broker, the forex trader, the chances, the undercapitalization and also the high leverage, the spread, the commissions, and the charges, the swaps, etc..

But imagine a world where there aren't any forex traders, no spreads, no commissions, no fees, no swaps... A broker entirely free with liquidity supplying banks free also.

Imagine that you don't form part of the 99% of losers, but of the 1 percent of winners, you simply win the exact same times that you lose. However, since there are no commissions or spreads you think that your balance will be the same, right? YOU'RE WRONG:

Recovering from a lose is more difficult than lose what you have won, if you win 1 percent and after that you lose a 1 percent you have less cash than in the start, if you lose 1 percent and after you win a 1 percent, the same.

Here I have attached an Excel template where you can observe that matematically: it has 6 sheets: 26_1: 26 trades at total, win -1% each one, with the same times of wins and loses; 26_2 and 26_3: the same that 26_1 but with the 13 losses and also the 13 winnes in a row and at different order. 100: the same of 26_1 however with 100 trades with 1% - also. Until here you are able to take a conclussion: whenever you trade, you're always losing (does not matter if you win or lose) a percentage that's equal to: number of trades / 200 whenever you're using 1 percent of SL and TP.

But in sheets 100_2percent and 100_10percent comes the most intriguing thing, they are exactly the same that the sheet 100 but with 2% and 10 percent of P/L in each direction (both SL and TP) respectively. Maybe you want to risk a little more to acquire more, it is a fantastic idea? NO! You will end up losing more money than if you only expect a 1 percent of wins: you lose a percentage that's equal to: number of trades / 50 whenever you're using 2% of SL and TP and number of trades / 2,5 if you anticipate a 10 percent of TP and risk the same, 10% on your SL.

So... If you have read till here you realize that we've got a issue here: if you're a scalper and overtrade with tight SLs and TPs you'll lose a lot of cash once the range of trades will probably be high. And if you trade on time frames and, in consequence, you need to risk more to acquire more, you have the same problem if you trade times.

So my conclussion is... Don't trade if you're not certain that you are likely to win, since the more you trade, the more you lose. Risk that the less you can in each trade and require little profits. In 1 sentence: trade with minimal profit in each transaction or you will end up losing your money just for opening trades. And I repeat, all of this is assuming no spreads and no commissions.

I have included a Bonus sheet, where you can see that if you risk a 10 percent in each trade, even if you win 52 times and lose 48, you will end up losing money, even without spreads!!! So, remember:

The more you risk, the more you'll lose even if you win more times than you lose.
https://www.forexsoutheast.asia/atta...4263936289.xls

I think one difficulty is that many currency traders believe they must be trading all the time. As opposed to waiting for a confidence commerce, they redesign a egy predied on what is happening on their computer. You see this in stock traders and you almost NEVER see that in futures or options traders, but you see in Foreign Exchange traders. Not really sure why...

Quote:

Originally Posted by ;

I believe one issue is that a number of currency traders feel they must be trading all of the time. Rather than waiting for a confidence commerce, they redesign a egy predied on what is happening on their computer right now so that they can enter a trade. You very rarely see this in stock traders and you NEVER see that in futures or options traders, but you see that quite frequently in forex traders. Not really certain why....

So true, I also have marked; lots of traders prefer to open new trades in each time, though there is no good entry point! That's the problem. As a result, here more than 90% traders are currently fighting.

Trade with no analysis is just one of the foremost reason behind losses. So it is more appropriate to ensure minimal analysis, if you'd like to avoid loses when trading practically.

Got new data, incidentally, 90% or 63% indies issue that is clear that is same. Majority become loser from the market place because traders try to make money out of here without studying, but there is no short --cut way to make sure great profit out of here.