Each person will have different causes of failure, of course, if the total number is probably more or less similar to it. But in this article I just listed the major and major reasons why I lost when trading Forex.
Volume on large orders
The large number of lots (Vol / Size) is the leading cause of losses. When the amount of hitting is big, every small red and green movement is enough to make your emotions change from nervous to happy or worried, depressed and then angry or scared, etc. The psychological pressure when making big orders is very different, it makes it easy for us to be deceived by the market not to believe our analysis or judgment or to make the wrong decision when the money is in the account. change too dizzy.
The second problem after the psychological problem of hitting large volumes is the Stop Loss. Setting a stop loss is important, but it's not that easy to place it.
- If you put it too close to the entry, your SL is easily scanned and does not change in any subsequent trend.
- If you set a bit far to ensure that when the price went to that area, the previous PT was wrong, the distance between Entry and SL will be relatively large, i.e. when the price touches SL combined with large hitting volume, the amount of money is lost. The hole was huge.
There are even times when you catch the trend very well, win the zone (zone) that trend will reverse, that is, have found a relatively accurate peak or bottom, but with the volume hit too big, you have not enough time. see the dawn that he had received a sentence of martyrs or was simply forced to cut losses to control the risk before something bad happened (LIQ).
Analysis is important, but the trade method is many times more important. Without the method, all analyzes are worthless
So limit the size to as much as possible, and it is best to set the margin ratio to less than X50 or x100, to want to beat is also not possible.
Fight between short and long
Short commands (Under frames H1 and below) and long orders (from h4 and up) both have different advantages and disadvantages. More specifically, it is expressed through two trading methods:
Scalp trading: Choose a position with strong movements and large volume, then take profit at a small difference: For example 5 lots, TP 15 pips, real profit $ 715
Position trading: Choose a position to start a new trend (break out) or a reversal to create a new trend and enter the order with a small volume, hold until the trend changes: For example, order 0.5 lot, TP 250 pip, profit $ 1200 profit.
The advantage of Scalp trading is fast, but it is accompanied by risks in the days of complicated movements or with big news with many candlesticks (candlesticks). In fact, if you apply both methods thoroughly, the profits are extremely great. But the problem I encountered is what?
Usually strong movements (big waves, fast, long candles) will take place for 1-2 days and then continue to the series of slow happening days. After each big wave goes through, we often tell ourselves to "gong" to eat big, "long hold" to eat. As soon as we gag, the price fluctuates back and forth with light words and then draws or losses, and back and forth a dozen times, we will tell ourselves "we know how to take profits a few more times than hold." . However, not long, the big wave brought many regrets.
Thus, it is impossible to say that position trading is better than scalp trading, but simply "right at the right time". Most people in general are very difficult to be flexible, we often get caught in the habit, namely: Short commands are very difficult to keep long, and it is difficult to eat big waves. On the contrary, wanting to eat a long order, having a long sideway wave is also quite challenging and hard.
Perhaps the best if you can still play long, of course you have to be brave enough for the challenge of waiting: Waiting for entry, waiting for the happenings, and waiting for TP. If you play short, play short purely, and both ways still need discipline.
Trade when mood / emotions are not good
The chaotic life is inevitable at times that make us feel bad, but instead of resting we still go crazy. And most of the time, large volumes are easy to get to. And both are the beginning of losses. Nothing more to discuss here, simply take a break when tired, frustrated. The time is long, the silver is open a lot, so do not be afraid of all opportunities, fear yourself out of money.
Block the ship (catch falling knives)
This is something I have to do sometimes, of course I know the risks of stopping an oncoming train. However, the attraction of the shortwave type on the quick return of 10-15 pips is very strong. And of course, there are big waves that cause a knife to be amputated. Setting active SL is also quick to be aware of the falling knife making these mistakes is not much and does not affect too much. But nonetheless sticky sometimes ^^
We will try to have the best orders to reduce losses, a good order is an order that obeys the principle: No need to keep your eyes on your phone, your computer, just put TP, SL, and a few price announcement points. to control what happens when the price runs. When there is a reasonable volume and a good entry, we will need less incense and a much better mentality.
Have you ever found it easy to win a demo account but lost in your real account, but go on learning more about technical analysis or looking for indicators and formulas. So what did you win earlier when you played tk demo? Let's deal with the best psychology that is not as simple as: Beat small.
And you, losses for what reason? Try to comment on why then ^^
P / S: Do not let Forex or Crypto turn you into a brute, though money is very important, but keep yourself happy, love life, because those who suffer your anger when losses are The ones closest to you are: Spouses, Children or Parents.
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