Why I Lost Money In The Forex Market!

There are two factors that I struggled with for a very long time which made me to be a complete loser and a gambler at times when trading. One, I did not understand trends and pullbacks in trends.

Two, I did not understand the potentials and dangers of high lot sizing together with proper money management/ risk management.

Let’s discuss these two in much detail.

Understanding Trends and Pullbacks

Uptrend

An uptrend is when price makes a series of higher highs and lower highs. To avoid confusion please allow me to use higher tops and higher bottoms. Refer to the picture below.

For my personal trading, when I see two higher tops and two higher bottoms I will define that specific market as an uptrend.

Pullbacks

A pullback is when price moves in the opposite direction of the trend. To best demonstrate this, let’s use an uptrend for example and assume that the price is at support. After an impulse move up, price will move back down. This move down could result from price being exhausted, traders taking off profits allowing sellers to push price down so that they, buyers, may buy back that market at a lower price. As you may have heard, sell high, buy low!

Downtrend

A downtrend is when price makes make lower bottoms and lower tops, opposite of an uptrend.

Again, for my personal trading, when I see two lower bottoms and two lower bottoms I will define that specific market as a downtrend.

These tops and bottoms are zones in the market where great trading opportunities lie. And we will talk about these opportunities in the blogs to come. Just stay tuned and learning!! Anways, as for me I was losing a lot of money because, before I understood this concept of trends, I would trade anywhere in the market. I had no discipline whatsoever on my approach to the market and I was always frustrated with the losses I was incurring.

To keep this blog short and sweet, I decided that I will post part two of Why I lost Money In The Market Part 2 where I will explain money management/ risk management.

In the meanwhile, share in the comments section below on what has been making you lose money in trading. It could be lack of discipline, not being able to read the charts properly or whatever it may be. I will by all means try and give advice on how to best deal with such and how to alternatively approach your trading to achieve different results.

I wish you all the best, traders!!!!!