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Why do most retail traders lose money?

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Maybe we often hear that 90% of retailers lose money in the forex market, although this statistic is still questionable, some brokers such as FXOpen UK on their official site are transparently informed that 60% of investors who use their services lose money. This means that most retail traders lose money.

But why do most retail traders lose money?

Quoting from the opinion of Ryan Pannell, CEO and Chair, at Kaiju Worldwide via Forbes, this is because most retail traders don't have a trading plan.

Retail traders focus more on dreams that may be too good to be true, not having a proper trading plan. According to him, the first important rule is "Plan your trade and trade your plan"

Besides that, most retail traders' mistakes do not stick with stop loss. Sometimes we often make mistakes because we change the stop loss value thinking the price will match what we think. The market moves dynamically, risk mitigation is very important in forex trading.

Some of the differences between retail traders and institutional traders are the capital they have, retail traders cannot influence the market, while institutional traders can influence the market with their rich capital.

We can learn the difference between retail trader and institutional traders can be found on the FXOpen blog.


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#1 - February 07, 2024, 01:01:11 AM

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