How To Lose Money Trading Forex
There are many ways to lose all your money in the Forex markets. Many traders are already very good at this already and do it on a daily basis. They do everything from overleveraging to overtrading. For those of you that want to be like them, read on and you will be losing money in no time!
One of the best ways to lose money is not having a planned and tested methodology to trading Forex. Just jump into your first real money trade from the first week that you learn about Forex! It's guaranteed to drain your account. Now you might get unlucky and have a few winning trades at first, but don't worry. Just make sure not to learn anything about the markets and how they work and just keep jumping in and out of trades.
Another guaranteed account killer is overleveraging. You can leverage up to 50 to 1 with Forex in the US. Do you realize what this means? You can deposit $1,000 and control $50,000 in the market! It just takes a few pips with this kind of leverage to ruin your account. So just go ahead and enter a trade with 50 to 1 leverage with no practice and you should be able to lose your account within minutes!
Revenge trading is also a big one. This is when you enter a trade right after another one doesn't go your way. Usually there are a lot of emotions that you are experiencing when this happens and you enter a trade to try to break even right away. Of course, you are not thinking clearly with so many emotions so you are bound to make mistakes.
Money management is absolutely necessary to make money in Forex. So if you are trying to lose money, just don't practice this! The professional traders risk 1-3% on all of their trades. But that doesn't matter if you want to lose money fast. Your account won't drop fast enough unless you're risking at least 5-10%!
The final way to lose money that I want to talk about is overtrading. This is tied in with revenge trading. Most people have no practice so they just trade whenever they feel like it. They are not picky with their trades and just enter whenever they want. This is a great way to lose money. If you are not patient enough to be picky, then I guarantee you will lose your account.
These are just a few of the best ways to lose money with Forex. If you do all or even just one of these things, you will definitely have no money to show for it. Usually sooner rather than later. If for some reason you want to actually make money with Forex, you would need to do the opposite of everything I just talked about. You would also need to learn a sound Forex trading strategy and practice until you can perfect it. But why would you want to do that?