Why Do Traders Fail Despite Vast Liquidity?

Trading is one of the most trending profession in recent times. People from diverse backgrounds are investing capital to get a big return. A major motivation behind such a decision is the ability to make money from this marketplace. If you are not living under the ricks, it can be easily observed that not all investors are successful. This sector oversees trillions of dollars transaction a day as millions of people are managing funds and rigorous regulations make it impossible to scam people. Despite this vast liquidity, only a handful of people are making a profit. It seems that there is either problem with the system or the sector is incredibly hard to crack.

In this article, we are going to explore this particular phenomenon why depositors fail even when the opportunity is at large. Thousands of resources have been published to elevate the performance but the condition has not changed. Perhaps knowing the underlying causes can help readers to understand this situation. Trading is not about making a quick profit and going bust simultaneously but sustaining the career consistently.

Take the industry for granted

This is one of the primary reasons behind their poor performance. They have not developed a sense of understanding in terms of handling cash. When people observe the prices are always moving erratically, they believe it is completely random. There are no factors involve and orders can generate revenue. However, it does not take time to prove wrong as soon as the first trade has been made. Every volatility appearing on the chart has some background factors which push this price to exhibit this particular pattern. News, information, financial decisions and national agreements impact the visible price movement.

Beginners fail to understand and perceive as it’s easy to crack. Instead of focusing on developing strategy, they assume and predict the future direction. No attention is provided on education and this significantly delays the success. Some made profits as overtrading leads to some random winning. This results in poor performance and every time deposit has been placed, it is at stake. If a person does not know how to swim, he cannot take advantage of the sea. He will not realize the potentials and eventually drown. Just because currency trading has the biggest transaction record does not imply random success to every person. The easier something appears, probability harder it is to achieve.

Liquidity does not guarantee profit certainty

This is a harsh truth in the exchange-traded fund industry. The balance does not promise investors to get their hands on the money. If you want to achieve success, work hard, and try to understand different movements. People observe the cars kept in the showroom but cannot buy them like the high-net customers. Watching professionals strike gold is mesmerizing but the process to endure this pain, to get this glory is full of failures. If proper methods are not being implemented, the money will not shift to the desired account. Traders need to adapt to changes and produce fruitful strategies that will assist in favorable volatility.

The best traders at Saxo capital markets Singapore always believe in price stability. Just because an asset is extremely volatile, it should not make tempt you to trade. Have a look at the price movement of dow jones. You will understand what volatility is. Try to trade this asset and soon US30 will be in your hate list. The volatility of the asset needs to assess properly before you expect any return.

No loss containment formula

Occasionally investors made money but without risks to reward ratio, profit can never exceed losses. This formula is crucial for ETF traders, as people inevitably lose. Sometimes a position is kept open to score as much money as possible but when the trend changes direction, it soon blows out the balance. Until an order has been executed expectedly, do not expect profit to accumulate.

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If you are unclear about cryptocurrencies and would like to know more, this blog is a must-read. Apart from explaining the concept of cryptocurrencies, it also lists some interesting facts that everyone should know about.

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