Trading in cryptocurrencies and foreign currencies (forex) results in losses for most traders due to the belief that they achieve significant profits from small amounts or large profits in a short time.
Traders are divided into several sections:
1- Traders: They trade in short positions ranging from five minutes to an hour.
This type is the most loss-making because it is affected by quick profits if achieved, and begins to increase trades in hopes of earning more.
They are affected by losses and try to compensate for them.
In summary: It is influenced by psychological state, and the markets are variable and do not always provide the same price patterns, making losses inevitable.
2- Day trader: They predict the rise or fall of the currency within a single day, following indicators and technical analysis, beginning to profit in the first days or weeks.
The rest lose because it is exhausting to follow the markets daily, and the other reason is that the human brain, when accustomed to a certain pattern, repeats without thinking. In reality, the markets are highly volatile; what works today may not work tomorrow or even after a month or a year, because markets change according to economic conditions and the opinions of market makers themselves.
3- Swing trader: They perform fundamental analysis of the currency and then decide to enter when the technical indicators align at a certain percentage.
They set targets to take a portion of the profits and leave the remaining profits to achieve more, and they set a stop-loss at resistance on the daily timeframe (D1) to benefit from currency fluctuations if it declines and begins to rebound to buy it again.
In summary: Risk is lower in this type, and profits are almost permanent, but it requires medium to high capital.
4- Position trader: This type is the investor, and most of those who enter the trading field do not adopt this type of trading as it requires a very large capital and holds the most popular currency for perhaps years in hopes of achieving large profits.
In summary: The type of trader who is speculative and day trading has a high loss rate, and it may be inevitable.
As for the swing trader and position trader, they earn continuously.
Note: Express your opinion on the reasons for traders' losses in the comments.
