Financial trading, especially in the cryptocurrency market, is always attractive because of its high profit potential, but the fact is that 90% of traders often fail. This is not due to bad luck but comes from deep-rooted causes of psychology, strategy and risk management skills. So what is the reason why most traders fail even though they have been in the market for a long time?
1. Lack of knowledge and skills
One of the biggest reasons traders fail is the lack of basic knowledge about the market. Many people are attracted by quick success stories and jump into trading without understanding how the market works. They often do not have a firm grasp of concepts such as money management, technical analysis, and trading strategies. In fact, trading requires more skills than simply buying and selling on emotion. Do not trust any gurus absolutely, signals are for reference only, not all-in.
2. Crowd psychology and FOMO (Fear of Missing Out)
Herd mentality is one of the big factors that cause you to make irrational decisions. When you see a strong market rally, you often get caught up in the fear of missing out (FOMO), which leads to buying too late when the market has already peaked. This leads to trading decisions based on emotion rather than analysis, and as a result, they often end up losing money when the market corrects.
3. Poor risk management
Most traders fail because they don't know how to manage risk. They often use too much leverage or don't set a stop-loss, which leads to losing all their capital after just a few losses. Not understanding how to optimize the risk/reward ratio causes many traders to lose control and fail. Trade with a steady volume and appropriate pguf. Usually only 3-10% maximum / transaction
4. Lack of patience and discipline
Discipline and patience are two important factors in trading, but they are very rare in most traders. They often do not follow the rules they have set, or change their strategy when they see the market fluctuate strongly. Impatience leads to trying to "recover" quickly, or not waiting for the right time to trade. This often leads to continuous losses.
5. Not understanding trading psychology
Trading psychology is an important factor that many traders do not realize until they fail. When the market is volatile, anxiety, fear, and greed can dominate decisions. Instead of following a trading strategy, traders are led by emotions, increasing the number of bad decisions, thereby creating a losing streak.
If you are continuously losing, it is time for you to stop and rest, not to continue all in on gambling.
6. Lack of adaptation to market conditions
Financial markets are constantly changing and do not follow fixed rules. Traders who are unable to adapt to new conditions often fail. A trading strategy may be effective at one time, but if it is not updated and changed with the market, it can become outdated and cause losses.
7. Overconfidence or excessive fear
Overconfidence after some initial success can cause traders to increase their risk unnecessarily. Conversely, traders who experience losses often fall into a state of fear and do not dare to make reasonable trading decisions, leading to missed opportunities.
The failure of most traders is not due to market factors but mainly due to personal factors and poor management. To become a successful trader, you need solid knowledge, risk management skills, discipline and a strong trading psychology. The market is always volatile, and only those who know how to learn from mistakes and adapt can survive in the long term. Learn and develop yourself well. Before you want to become the 10% of successful people in this market.
