Forex Traders - Why Traders Lose Money

by : Harold Hsu

Many people claim to be trading to make money. But the more I talk to them, the more I'm convinced that's not true. It's not that they're intentionally lying... it's just that they don't truly understand their motivations for trading. Their intentions and actions don't reflect the same thing.

The thing is... many people in this world are bored with their lives. For many years they wake up in the same bed, drive the same car to work, sit at the same desk, see the same faces, push the same papers and go home to watch the same silly TV shows before going to sleep. And the cycle repeats day after day. Many people are dead bored with their lives. And they want to feel alive... so they turn to the exciting game of Forex trading where they look for emotional stimulation.

Although they won't admit it, most poor traders don't trade for money. They THINK they're trading for money... but they're actually trading for entertainment. They trade as though they're gambling. These people love the thrill of winning, and the anticipation of a losing trade turning around in their favour. They trade to win, and to feel good winning; they don't trade to make money.

And that's a very dangerous mindset to have.

Once you're looking for excitement in the market, you're finished. There should only be one reason to trade, and that is to make money. This is one of the easiest concepts to understand, and yet one of the hardest to master in actual trading.

Amateur traders tell themselves they want to make money. But when the game begins the emotion of the trade takes over, and they forget even this most simple concept. They let the emotions of hope and revenge take over their trading decisions and inevitably lose the shirt on their back.