key Factors-Reasons Why Traders Lose Money in Trading Financial Markets-Wikipedia of Finance

Key Factors / Reasons Why Traders Lose Money in Trading


Retail traders are basically individuals. They do their own analysis and take risks on the financial markets. Assume that out of 10, trades mange to get 8 profitable trades and 2 losing trades. A single mistake can create huge difficulties for the investor. These losing trades can wipe out all the profits earned through 8 profitable trades. Most of the times traders fail to understand the reason behind their failure. So it is important for every trader to understand the key factors and reason why traders lose money in trading across financial markets.

Without facing problems, no one can make money. Try to work hard to develop a glorious career in Forex trading strategies. Traders must learn to take responsibility to make the decision properly. Learn to work according to the blueprint that will help you to get good outcomes. They must try to build the important capabilities which will help to do shine in the trading field.

Key Factors / Reasons Why Traders Lose Money in Trading

Taking right step and right decision will help you to handle the difficult situation but emotions will overtake your decisions. It is equally important to handle your emotions while trading. Let’s explore these key factors and reason which are responsible for losing money in financial markets.

Not keeping the trading Journal

You should always keep a record of the previous activities which will help to improve performance in this zone. Try to maintain the record properly to collect the right information. In the Forex, by knowing about their errors, you can take the right action. Take logical steps to lessen the percentage of mistakes so that you can get good outcomes.

Learn to take the notes immediately after taking the action. Learn to deal with the difficulties to cross the big path. Logically determine your weakness and strength. As a consequence, you will get the chance to employ the strength and reduce the weakness. If you face any problem, you should review the journal daily or monthly to modify the plan.

Not investing time in making the plan

Traders need to invest time in developing a strategy for trading futures online. The proper implementation of the strategy can provide you the chance of making money. Traders should do proper research on the market which will help to develop sound wisdom about the market.

Proper analysis will help the person to develop the right roadmap. When you have a plan, you can deal with the market. The strategy will help to deal with the difficulties. Traders should try to make several strategies to adapt to the different circumstances. This kind of strategy will help you to stay on the right track. 

The elite traders never rely on a single strategy as it can be the reason for facing a losing streak. But, sometimes, this is seen that the person can’t invest time in developing the strategy. And for this reason, the rookies often fail to generate a fruitful strategy. Try to make a simple plan which will help to make the right decision.

Recency bias

If you fail to avoid the recency bias, you cannot go ahead. Traders must contemplate the present situation for making the future better. If the investor overthinks about the past outcomes, he will do better.

Proper modification of the plan will help to increase the income. Investors have to take the right action in the currency time which will help to do better in the future. But they should not be biased about their past trades as it will make things very hard. And remember to avoid the carry trades till you become comfortable with the overall trading process.


Sometimes, the investors should stop overtrading. By finding a few good trade signals, the investors can easily make decent money. But if they overtrade, it will increase the cost. So, try to trade according to the strategy so that you can stay in this zone for a long time. The overtrading tendency emerges because of greed. 

Try to improve your performance to become victorious in the Forex market. Focus on the proper learning process to increase the cognition level that will help to take the right steps. Without money, you cannot take a single step in this field. Try to start with a decent capital as it will help you to reduce the stress at trading.


So, it is your prime duty to save the account in any sort of difficult situation. Without knowing about the pros and cons of the situation, traders can’t do this. The market will not provide money automatically as it is not an ATM machine. Here, you have to develop some good techniques that will help you to increase the percentage of winning trades. So, try to think differently from others and execute the trades based on logic. 

How useful was this post?

Click on a star to rate it!

Average rating 5 / 5. Vote count: 9

No votes so far! Be the first to rate this post.

We are sorry that this post was not useful for you!

Let us improve this post!

Tell us how we can improve this post?

Leave a Comment

Your email address will not be published. Required fields are marked *