Do you want to know why such a high number of traders fail and what you can do to succeed?
In this blog post,you will learn why 80% of traders fail and what you can do to not only survive but build a striving online trading business.
Many traders start trading live before they have done adequate research about trading.
You need to master the security that you want to trade in and out, you should also research your broker and his platform adequately.
Before you open a live trading account, you should have read enough material to be familiar with the business of trading.
Research should go all the way to finding everything about the security before you enter a trade.
Lack of professionalism
New traders do not run their trading like a business, they don’t have a business plan, they don’t keep records and they do not have education and skills development plan in place.
Most traders don’t attend seminars, they don’t hire professionals to help trouble shoot the business and they don’t consider networking for consultation and development of new trading procedures.
Lack of effective controls
New traders often fail to put adequate measures to prevent loses like stop loses, risk to reward ratios and bankroll management procedures.
It is recommend that if you lose 5% of your capital in a day, you should stop trading. Most traders don’t have such a limiting thresholds in place.
Lack of clear goals and objectives
Most traders don’t have goals or they have fake goals. A business plan can help one outline the objectives of the trading business.
Do you want to make additional income from trading? Are you trading to make millions of do you want to trade for a living?
A clear well written goals will skyrocket your trading as it will lay down the expected rate of return per day and therefore the appropriate strategies to apply.
High cost of entry and of trading
Some forex brokers require clients to start with huge capital and they charge huge margin which make it hard for traders to start business and to stay in business.
However, with adequate research, a trader should be able to get into business with a small amount of starting capital.
In Kenya, traders can register with hot forex and start business with only ksh 1000 that can be deposited through mpesa.
I have been able to trade with hot forex for sometime now and what you realize is that they have competitive spreads that doesn’t strain the trader.
Lack of sufficient government support
The government is supposed to regulate brokers in Kenya but it have been slow to do so. You can find brokers who are nothing better that just scammers.
As a trader, you should work with well regulated brokers who have been in business for a while and have a track record of honesty.
If you are looking for a broker who can deliver on their promise, you can work with hot forex, I have been trading with them and I have noticed no sign of cheating.
Lack of entrepreneural spirit
80% of traders give up within the first two years of opening shop. This is mostly due to challenges that they encounter as a business.
There is no business that doesn’t have challenges, you should endeavor to face them as they come knowing that the more you read and the more experience you gain, the more your odds of winning.
Traders who fail are the ones who don’t benchmark with other traders, their plans and the industry at large.
You should use your preset benchmark to evaluate your progress and use the achievement of your colleagues to gauge your success.
Lack of specialization and expertise
Traders who are in their way to failure and closing down are chunking all trades and specializing in none.
They are not focusing on certain market segments and securities, they don’t have an edge when it comes to what they are trading.
Though you should trade several market for diversification,you should choose the securities to specialize in in those areas.
If it’s commodities for example, you should choose to specialize in sugar or oil. With time, you will be the master when it comes to matters oil trading.
Lack of creativity and innovation
Just like the 🧱 and mortar business, traders should be creative and innovative, you should come up with new trading strategies that will make you money in the market.
Successful traders are able to trade several strategies. They have two to three strategies for volatile, trending and ranging markets.
For that reason, they are almost always in business and they only bull the trigger at the right time because they have several options.
Amateur traders on the other hand are being overcomed by impatience and enter trades at the wrong time because they only have one idea.