Why Traders' Fail?

Most aspiring forex traders unfortunately do not ever achieve the success they desire when starting out. There are a number of psychological errors at work here that contribute to failure in the forex market. This article will focus on one of the primary psychological errors that hold traders back from achieving their desired results; over-complicating their forex analysis and strategy. It is extremely easy for forex traders to fall into the trap of thinking that their method needs to be technically difficult to understand or that they need to do extensive analysis in order to consistently profit. On the contrary, in reality the emphasis placed on trading methods and trading systems is way out of proportion to the relevance of the topic towards long term trading success. A simple forex trading strategy designed around a clean price chart is all you need, technically speaking, to build a trading method that allows you to profit consistently. It is not uncommon for aspiring forex traders to start out with a simple trading method but over time add indicators and other analysis tools to it, before long it becomes a mess of confusion that when applied to your trading screen can literally take on the appearance of a piece of abstract modern art. It is crucial that any aspiring forex trader understand the psychological origins and implications of using overly complicated trading techniques. The natural tendency of people who do not make very much money to assume that people who do make a lot of money are employing some super complicated technical secret that leads to riches is at work here. It is human nature in our modern day capitalistic society to assume that making a lot of money from relatively little work is simply not possible, which is generally true out side of the world of financial speculation. Therefore, when applied to the world of forex trading this tendency drives traders to read every economic release and try to analyze its market implications, as well as place numerous lagging indicators on their price acton charts. As those of us who have traded for any period of time will attest to, more is not often better in the forex world. Over-complicating your forex analysis and strategy is one of the first psychologically induced problems that traders will encounter. Unfortunately in the world of trading one psychological mess up usually leads to another and once the ball gets rolling it is only after losing more money than you care to remember that you actually realize you are doing something wrong. So the remedy to this problem is to just accept the fact that it is almost always better to employ a simple forex trading method that makes use out of a clean price action chart than to spend hours combining different indicators and trying to understand their mathematical foundations or trying to program expert advisors and the like. The cold hard truth about forex trading is that there is no magical system or formula that will allow you to make insane profits from a tiny amount of money; it is just an inherently flawed concept to believe that. There are however simple forex trading strategies that can reduce the emotional implications of trading and allow you to steadily make consistent profits over time. Discipline and conscious control over emotional state are the two factors that determine forex winners from losers. Emotions help us in most other professions but when it comes to trading success they are our worst enemy, in other words, we are our own worst enemy while trying to succeed at forex trading. Trading a simple forex method such as price action analysis is the very first step that any aspiring trader should take if they truly want to excel in the hyper-competitive forex arena. Clean up your price charts and start using price action to trade Forex, it is the most logical first step towards achieving your goals as a trader.