Why do so many people blow their accounts on forex?

[nuh514]

Some people are used to repeatedly blow their trading accounts. The simple reason is their trading in gambling ways, using no stop loss, using higher leverage are reason that take you towards blowing your account faster.

Stop loss is very important in forex trading and this should be the habit of every trader to put stop loss on the time of entering into a position. I lost all my money due to my bad habit of not putting the tool of stop loss in my trades. Stop loss limits our losses and we should also not forget to put take profit tool in our trades.

[yogesh]

When we get into huge losses due to some reason it make us upset and we turn aggressive may be we start trading wild, use higher leverage to get your money back faster. This probably is the biggest mistake we do and lead to further big losses.

[kajole]

Ok, stupid question but I just started playing around with forex... I don't get how people can lose their whole account so quick.. Aren't the odds of winning or losing a trade close to 50/50 if you set your stops far enough? say I have a $10,000 account and trade 10,000 units of eur/usd every trade so thats $1 a pip and set my stops at 50pips and every trade I do the same thing. THen I flip a coin and say heads I buy and tails I sell and do this over and over.. it should still be close to 50/50 right? Now what if instead of a coin I increase the stops to 100 pips and just follow the trend using simple fundamental techniques? This should be a good way to win right? What do you think?????

Additional Details
simion-yes I know, there's of course reasons why the market moves the way it does but the coin does not know or care. So if the USD suddenly decides to turn around and I sold the EUR because that 50/50 coin toss decided tails then I make money. The chance is still 50/50 because the chance of hitting either stop is close to equal. I don't see what leveraging has to do with it this. If I use leverage to increase my buying power I don't go full leverage because that's the easiest way to kill yourself, that's obvious I think you're just increasing your chance of getting margin called especially with 50/50 probability. The only factor swaying the 50/50 is the spread. THank you for your response though I am just trying to figure out and this was just my initial view of the market.. I'm far off from learning fundamental methods of trading, it will take me years to understand it and even then I don't think that knowledge will pay off if I don't have the fortitude to make confident trades.

The main reason that the expert trader in the market only 5% and 95% trader are low knowledge about forex and they start trading without analysis and they take big risk as a result a little movement can destroy his account. Expert trader never frustrated and they stay in long term for a single trade.

[sammy]

most of the newcomers like me blow their accounts and gets margin called due to small capital, excessive leverage and opening 2 3 trades with very low principle and high leverage. so avoiding these might help.

[kapil_chemical_07]

Hi brother, at first I want to give you thanks from the deep of my heart for the very beautiful post.I think you are right and I like your opinion very much.These information are very helpful for all kinds of traders.Best of luck for you.

[nurhidayah]

Some people are used to repeatedly blow their trading accounts. The simple reason is their trading in gambling ways, using no stop loss, using higher leverage are reason that take you towards blowing your account faster.

this is what we should note carefully that this is indeed the process of trading we have we can adjust to some of the things we had to align with some of the steps that we can Match with procedures we see our account is to be blown up or made ​​as a place where we invest safely

[yogesh]

Some people are used to repeatedly blow their trading accounts. The simple reason is their trading in gambling ways, using no stop loss, using higher leverage are reason that take you towards blowing your account faster.

[espin]

some people start trading without analyze the market in some cases when they face loss at that time some people do not like wait for his success at that time they blow their account.

[mojcris]

I think most of the people think that forex is like games or casinos !!! where they have so much risks and it's kanda playing!! or some of them think that they can earn millions of $$$$ almost overnight !!!! and it's not right...

[budikusuma]

they do not have good money management plan and this is one reason they buy or sell more than that they can afford so this is one big risk that they some times see forex is getting out of their control so this is one big basic mistake people make. I have good money management plan mostly so I do not get too many margin calls.

True. is planning in the psychology of trading that will make us more comfortable
because when we face the possibility of even the worst, it will not interfere with our psychology that we've got a good plan to address it.