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It is often said that the odds of being consistently profitable and succeeding in the forex market are very slim, as more than 90% of traders are bound to face failure.

Here are five common reasons why most traders lose trade:

1. Disregarding the importance of a Forex Demo Account

The practice account offered by your broker is there so you can familiarize yourself with the forex market and the trading platform, as well as build and backtest a reliable FX trading strategy. It does not risk any capital the whole time!

Take advantage of all the features of your demo account and build a solid understanding of the Forex market before moving on to a live account. They say “practice makes perfect” for a reason!

2. Failure to Manage Risk

Risk management is the key to survival as a forex trader as in life. You can be a very skilled trader and still be wiped out by poor risk management. Your number one job is not to make a profit, but rather to protect what you have. As your capital gets depleted, your ability to make a profit is lost.

To counteract this threat and implement good risk management, place stop-loss orders and take-profit orders as long as you have a reasonable profit. Use trading scales that are reasonable compared to your account capital. Most of all, if a trade no longer makes sense, get out of it.

3. Giving in to Greed

Some traders feel that they need to squeeze every last pip out of a move in the market. There is money to be made in the forex markets every day. Trying to grab every last pip before it reverses can cause you to hold positions too long and set you up to lose the profitable trade that you are trading.

The solution seems obvious here, just don't be greedy. It's fine to shoot for a reasonable profit but there are plenty of pips to go around. Currencies continue to move every day so there is no need to get that last pip; the next opportunity is right around the corner.

4. Indecisive Trading

Sometimes you might find yourself suffering from trading remorse. This happens when a trade that you open isn't immediately profitable and you start saying to yourself that you picked the wrong direction. Then you close your trade and reverse it, only to see the market go back in the initial direction that you chose.

In this case, you need to pick a direction and stick with it. All that switching back and forth will just make you continually lose little bits of your account at a time until your investing capital is depleted.

5. Buying a System

There are many so-called forex trading systems for sale on the internet. Some traders are out there looking for the ever-elusive 100-percent accurate forex trading system. They keep buying systems and trying them until finally giving up, deciding that there is no way to win.

As a new trader, you must accept that there is no such thing as a free lunch. Winning at forex trading takes work just like anything else. You can find success by building your own method, strategy, and system instead of buying worthless systems on the internet from less-than-reputable marketers.

In order to avoid losing trade, you should:

●Do your homework and look for a reputable broker.

●Use a practice account before you go live and be sure to keep analysis techniques to a minimum in order for them to be effective.

●Use proper money management techniques and to start small when you go live.

●Control the amount of leverage and keep a trading journal.

●Be sure to understand the tax implications and treat your trading as a business.