The 3 main factors that restrict retail trader’s from making money in forex

Forex gambling

There’s loads of inexperienced answers on the internet

I’ve read a lot on the internet about why traders lose money and are not successful.

They range from using the wrong brokers, wrong indicators, trading wrong currency pairs, trading the wrong time frames, screwed up psychology, etcetera .… the list appears to be endless.

But after 28 years in the market, 8 of which have been working with retail traders, I can isolate it to 3 major reasons why they aren’t successful & they stick out like a sore thumb.

I could apply these 3 reasons to every trader that I’ve ever come across and it will explain to them why they weren’t successful. I urge you to think about these 3 things before you start throwing your hard earned cash into the market.

If you can tick these off your list then your chance of success will increase by roughly 1000%.

The 3 reasons I believe why traders aren’t successful are:

  1. They have no ‘Capital Management’ structure/plan.
  2. They have no ‘real’ understanding of the forex market.
  3. They don’t have the right tools to trade.

I built Traders4Traders with the sole purpose of proving retail traders ‘first-hand’ experienced knowledge of the markets and capital management.

Everyone that comes through the courses is amazed at the structure of the market and our analysis. But most of all it’s the capital management where they have the light bulb moment.

Capital Management

Trading is all about managing risk. If you have no risk plan then you’re simply gambling & that’s what the majority of people are doing. So it’s no wonder they get their accounts cleaned out in no time at all.

Our capital management system has a plan for drawing up (when you’re making money) as well as when you’re drawing down (losing money). You need that complete structure to control your cash. If you don’t have this structure you’ll be leveraging up after every losing trade and that’s when things get crazy.

Plus I know so many traders stick $1,000 in an account and hope to turn it into $100,000 in a week or month. Sorry, I hate to break the news to you, but that just isn’t going to happen. You can make that cash but you need structure and it will take time to get there.

How much money you make is determined by how much capital you have. So having realistic expectations is a key part of capital management. Once again if you don’t have a solid capital management structure you’re going to get hammered!

Understanding the Market

First thing you need to understand is the Forex market trades differently to the equity markets. I know the majority of traders have experience trading shares but this is different.

The fundamentals in the Forex market (central banks, economic data) are transparent and the market reacts quickly and aggressive to them. If you aren’t aware of how the fundamentals operate then once again you are going to limit your chances of success.

The way I look at it, it’s like this; the technicals provide us with entry levels & the fundamentals provide us with direction.

You connect specific entry levels with specific direction – now you’re trading with the market and that’s where the cash comes flowing in!

Of course there are loads of minute details on both the technicals and fundamentals that you need to learn, but on the face of it, that’s it. Most traders don’t understand either of them and that’s why they are more often than not, ‘trading against the market’ & consequently losing money.

Tools Professionals Use

Last but not least are the tools you need to complete your analysis & trade execution.

The trading platforms are free when you sign up to a broker, so that’s not going to cost you anything. But the platform alone isn’t enough to make trading decisions. It’s an execution portal and that’s it.

Believe me if you’re using MT4 then the charting and execution tools on this platform are rubbish.

We use MT4 as our execution platform but we do all of our analysis on Reuters Xenith.

To make MT4 useable I built some ‘execution software’ to enhance the trading process. So now I can trade multiple pairs at the click of 1 button. You’ve got enough things to think about when the currencies are moving around without fumbling over the trading platform trying to get your positions on and your exits set.

So extra trading software is one of the tools you need to consider. Check ours out or check the internet for some. It’s essential, especially if you’re using MT4.

More important though is your connection to the market and that’s where Reuters Xenith (Metastock) comes into play.

Reuters is the same product all the bankers use. It has extensive technical and fundamental analysis tools as well as real time economic data releases. This is your life-line to the market and without it you’re trading blind.

Quick Introductory Overview of Reuters Xenith

I know loads of traders try and cut corners and costs when starting out. But believe me if you don’t have this then you might as well give up now. It costs a measly $99 a month. If you can’t afford that then have a rethink about trading.

Also if you don’t have access to live releases you’re officially out of the loop. Your only option will be staring at sites like Forex Factory and waiting for the economic data releases to appear there. They do come up, but 2 minutes too late. That’s like a full day late in forex time frames.

Having access to the right tools to trade is just as important as capital management & understanding the market. Now don’t misunderstand what I’m saying. You don’t need to go out and buy 3-5 screens. You just need access to the live market – information, economic data and analysis.

In fact if you do purchase Reuters Xenith you can download all of our templates directly off our website, so you’re set up and using it straight away.

Failing to plan is planning to fail

So if you really want to trade for a living or simply trade to make some extra cash make sure you have ticked off the 3 points above. If you haven’t then you’re basically setting yourself up to fail.

Our Pro Trader course has everything you need to build a solid trading foundation in market understanding & most importantly capital management.

Reuters Xenith provides the necessary tools for you to analysis the market and make the right trading decisions at the right time.

How much are you planning on making? Thousands….tens of thousands?

What’s your total outlay to get set up as a Pro? It’s less than $200 per month.

For some weird reason new traders think they’ll make the cash without having the set up…and it just isn’t so.

Think about it…. Do you honestly have these 3 factors covered?

If you’re looking for help or advice, give me a call or send me an email and I’ll explain what you need and how long it will take.

You’ll be surprised at how little investment in yourself you need to make, to have an endless access to the biggest cash register in the world, the forex market!


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  1. Very interesting approach. Do the banks watch horizontal support en resistance lines/zones as well and if not what is the reason for that? ?

  2. Well, they sort of do, but it’s generally when a currency pair has topped out a specific high or low 3 or 4 times. So some support and resistance levels turn out to be horizontal levels. Don’t forget the change from one big figure to the next (i.e. the big round numbers) also act as horizontal support and resistance although traders don’t draw trendlines at these levels.

    They don’t draw random horizontal lines all over their charts because that’s not the way support and resistance levels are formed. The technical analyst ‘purists’ shun the drawing of horizontal technical lines all over your charts.

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