Why most of the market participants lose their money?
As far as I have seen a lot of traders so far, 80% of those traders just ended up losing their money in the financial market.
Today, I want to make it clear to you the specific reasons why those people couldn’t make money by trading.
Can’t follow the right money management.
Most new traders are not able to do trade with a stable mentality.
Once you lose your mind while trading, it is gonna be almost impossible to recover, especially if you are a new trader.
In order to prevent this issue, you need to have specific risk management rules for your trading.
Maybe this article will help you ↓↓↓
Don’t know how to identify chaos market and orderly market
If you want to make profits by trading, you need to trade only in the orderly market.
Here I mean the orderly market is the market has clear price direction to go.
On the other hand, the chaos market is the market doesn’t have a clear price direction.
Generally, the market moves with repeating this chaos market and orderly market over and over.
So, the ability for identifying the current market situation is an essential skill for every trader.
Now, let me explain about this in detail with some pictures.
If I explain this super easily,
Orderly market = Trend market
Chaos market = Range market
When the trend market era is over, then the chaos market era will be taking over the market for a while.
What you have to keep in mind here is, “Don’t be rush”. You need to have some patience during this time.
But the range market won’t last forever, right? It will be broken out sometime and starts forming an orderly market again.
How to predict where the price will be chaos
When the offense from long term time frame traders collides with offense from short term time frame traders, this eventually causes a chaos market like below picture.
(15 minutes chart)
According to the Dow Theory, this situation can be regarded as an uptrend. So, when the price makes a dip, a lot of traders will be trying to buy here.
But, on the other hand, some people will also try to sell in this situation because there is a strong resistance level of the 4h chart on the top.
In this case, Market is gonna be easy to make the chaos just like the picture.
And actually, it is pretty hard to win with stable probability at such a market.
Then what should I do? Just be patient. Wait for the market will take back the order by breaking the range into either sell or buy direction.
As I always say, “Waiting” is the most important job for a trader. If you cannot be patient enough, then just will end up losing all the money from your deposit.