Hi all,
Just wondering what exactly do newbies do to lose?
I mean when you open a trade, regardless of any analysis you do, you are issued a 50:50 chance of winning/losing, so how do you lose overtime?
Well, i guess the first thing is trading cost, every trade you make it will cost you about 3 pips, so if a newbie makes 100 trades, 50 wins and 50 losses of equal size, they will end up down 300 pips. I think newbies have a tendency to make many many trades in a short period of time, the market rise a few pips and they buy, the market falls a few pips and they sell, expecting some massive rally/selloff to start, (i know i did). So this is going to cost them. The next thing i guess is they tend to close a trade as soon as it moves into a few pips profit, and hold a trade as it moves further and further into loss, but how does this result in net loss? surely you would just end up with many small gains equalling a few large losses, unless you MC the account altogether.
Anything else? using too much leverage?, this only accelerates the process of winning/losing, so can't really be assigned to the cause of losing.
Anyone care to share?
Just wondering what exactly do newbies do to lose?
I mean when you open a trade, regardless of any analysis you do, you are issued a 50:50 chance of winning/losing, so how do you lose overtime?
Well, i guess the first thing is trading cost, every trade you make it will cost you about 3 pips, so if a newbie makes 100 trades, 50 wins and 50 losses of equal size, they will end up down 300 pips. I think newbies have a tendency to make many many trades in a short period of time, the market rise a few pips and they buy, the market falls a few pips and they sell, expecting some massive rally/selloff to start, (i know i did). So this is going to cost them. The next thing i guess is they tend to close a trade as soon as it moves into a few pips profit, and hold a trade as it moves further and further into loss, but how does this result in net loss? surely you would just end up with many small gains equalling a few large losses, unless you MC the account altogether.
Anything else? using too much leverage?, this only accelerates the process of winning/losing, so can't really be assigned to the cause of losing.
Anyone care to share?