Reasons for losing money in terms of psychology

 
Lack of trading skills

What would seem to be the problem here? You just have to buy it cheap and sell it expensive. It's this excessive simplicity that magically attracts fast-moving earners. But in the end, a self-confident novice trader, because of his ignorance of the laws of the market, loses most of his money.

Lack of trading methods.

Traders do not always use trading strategies. And if they remember about them, they often do not bother to pass the testing on a demo account. Often, their methods are not adapted to their personality. A trader's lack of experience is compensated by intuition, opening positions without any system. Chaoticness and haphazardness in trading affect the financial account.

Waiting for one's own emotions

Beginner traders do not have a clear trading plan, following which they can work quietly. The impossibility to subdue emotions is a direct way to a negative balance. It is known that from a beginner to a professional the emotional background of a trader changes during three stages:

The initial stage takes the first six months, when any profit made is expressed by stormy delights, and losses cause depression. 
The second stage takes from six months to five years. Psychology adapts to the market, success is taken for granted, and losses are treated as ordinary costs. 
The third stage lasts from five years and may never end. Trade becomes routine, daily success and losses do not cause any emotions, because the brain gives the command not to waste nerve cells. An outsider will never guess by the trader's behavior whether today's trade was successful or lost. This is the highest level of trading psychology. 
Systematic violations of the chosen strategy.

Insufficient observance of trading discipline is typical for both beginners and experienced traders. But only a disciplined trader can achieve success in the market. That is why endurance and discipline need to be trained.

Exchange of a working tool for a new "more interesting" one.

An unverified instrument causes uncertainty about the participant's actions, and the trading deposit decreases. To work with profit, one should feel the movements of the instrument, react to them in time.

Changing the course of trading because of someone's or someone's advice

A beginner trader tries to listen to the recommendations of reputable experts, but even they cannot guarantee 100% profit. It will be more reliable to develop your own method of trading, constantly improving and deepening it.

The research results show that knowing the reasons leading to losses, a trader will take his trading principles more seriously. This will help to save a deposit, make a profit, and most importantly - to gain experience, which will only grow today. Therefore, it is necessary to survive the failure, make appropriate conclusions and save the trading deposit. You just need to survive the loss of your trading account, make the right conclusions and move on. 

Johannes Röll

Johannes Röll was born 1978 in Brilon,Germany. Graduated RWTH Aachen University. Over the past ten years he worked as Head of the plastic card team, where he was mainly responsible for the development of the distribution, Head of sales Department and Financial Analyst,where he got experience in planning and support sales figures for branches. For the present he works as freelancer

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