The main reasons why most people lose money when speculating in foreign exchange are as follows:

Excessive leverage: Although currencies may fluctuate, violent fluctuations are uncommon.

2. Asymmetric risk-reward: Experienced foreign exchange traders keep losses to a small range and offset them with profits when price movements are favorable.

3. Platform or system failure: Imagine if you have a large position that cannot be closed due to platform failure or system failure. It may be a power outage, Internet overload, or computer crash. It also includes During periods of abnormal fluctuations such as when stop loss and other instructions fail.

4. Exchange rate fluctuations: High leverage means that trading capital may be quickly depleted during periods of abnormal exchange rate fluctuations.

5. OTC market characteristics: The foreign exchange market is an OTC market and is not as centralized and regulated as the futures market. This means that foreign exchange transactions are not guaranteed by a clearing agency, which increases counterparty risk.

6. Fraud and Market Manipulation: Fraudulent behavior occasionally occurs in the foreign exchange market. Market manipulation of foreign exchange rates is also rampant, implicating some of the biggest players.

7. High handling fees + spreads + overnight fees + slippage. (ATFX zero handling fee, low spread platform and high stability) Click to learn more

8. Heavy position trading.

9. Misunderstood the so-called teacher’s orders to do market data.

10. Do not set a stop-profit or stop-loss.

1. After placing an order, you must set a stop loss and stop the loss strictly.

2. Strictly stop losses when placing orders in the wrong direction. Small losses are not terrible as long as they are not big losses.

3. If the order is placed in the correct direction and the stop loss is moved upward, and the stop loss is moved higher than the original order position, even if the stop loss is swept, it will still be a profit.

4. Maintain a good attitude and don’t hold orders. You cannot control the market. Holding orders often leads to liquidation.

5. Don’t listen to any analysts and don’t lock up positions. Locking up positions is equivalent to chronic suicide. Lock position (when the direction of the order is wrong, such as trading a long order, seeing a loss, and then entering a short position later, this is a lock position, and the apparent loss will not increase.

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