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Why around 90% of all traders lose money at Olymp Trade and how to end up in the remaining 10%?
According to Olymp Trade statistics, around 90% of all traders lose money on the platform. This is only leaving 10% who are earning. Of course, this 90% were not planning to lose their funds. They may even occasionally open winning trades. But in the end, the profit is too small to cover a huge loss.
Why the percentage of traders who lose is so high?
Incoherence is the number one reason. These traders are familiar with various markets and strategies and they want to use it all. They think this is the way to maximize the profit. Trading on several markets, multiple assets,and different strategies. All at once.
Besides, they are not faithful to the previously created plan. Taken together, all this will ultimately generate massive losses.
So the main reason behind losing money trading is using too many strategies at once. Imagine that you have come across a new trading strategy that seems to be flawless. You want to try it right away.
You open some transactions that end up successful. Encouraged, you invest bigger money. This time you lose. Annoyed and frustrated you cross the strategy off your list and search for the one.
Is the new one will be really better? You should check precisely what had caused your loss. Maybe this strategy is accurate only on the trending market? Or maybe just on ranging? This is what you should check before giving up on a particular strategy.
These are the reasons why so many traders lose their money. Now is the time to discover how the other 10% win.
How around 10% of traders generate profit at Olymp Trade?
The reason why 10% is actually making money at Olymp Trade is coherence. What coherence? In using trading strategies, to begin with.
This group of traders is using just a few strategies. They do not jump from one to another. They analyze them and choose what is working. And the thing is there are no better and worse strategies. What matters is when you use a particular strategy and on which market.
For instance, they have one strategy for currencies and they will apply it merely when the market is trending. They will use another one for commodities on the ranging market.
It is quite important to understand that a specific strategy may work excellent under some conditions (a certain type of asset, trending/ranging market), but you need to find a different one when the situation changes.
A few steps to success on the Olymp Trade platform
Number one is to use the Olymp Trade practice account well. This is a place where you should try every new strategy. And not only once, but until you feel comfortable using it.
Number two is to decide where you wish to trade. Choose the markets that fit your trading style and apply appropriate strategies. The best would be to choose just a couple of markets that are related.
Let’s say you favor currencies. Good, choose two, maybe three pairs. Do you prefer commodities? Then pick silver and gold, for example. Why just a couple of markets is better? Because you have time and opportunity to get them to know well. With a little bit of practice, you will start to notice repeatable patterns and you will read the chart faster. And this puts you in a better position than 90% of users are.
The next step is to choose the period of the candles and the duration of the trade. So this point is about timing. I prefer 5-minute interval candles while the trades last from 15 up to 30 minutes. I think the technical analysis is much simpler like this.
Do not forget about the right choice of the indicators and the type of chart. My recommendation is the candlesticks chart as it is easy to follow.
The last step I want to describe here is the selection of the money management strategy. This will include measures you need to take to protect your money and the amount of your investment. Remember, that it is better to make a profit slowly but consistently than lose everything. Invest rather a small amount in a single transaction so you will not lose a lot when the trade fails. If you are a currency trader, set always stop loss to secure your funds.
Your success depends on many things. The main is consistency in choosing the right trading strategy in the right market. Then there are other decisions you will need to make that I described above. Capital management, as well as emotional control, cannot be underrated.
Know the market of your choice
As I said before, you should focus just on a couple of markets.
To know the market you need to analyse the price movements. Look at the most recent period on the chart. It will provide clues as to whether the prices are ranging, going up or there is a downtrend. You will then, based on this piece of information, decide on your further actions. Is it a good moment to open a position or is it better to wait for the more encouraging situation on the market?
It is crucial to know when to enter the trade. But to know when not to open a position is no less important. When you understand the market and use the appropriate strategy, to distinguish the two above should not be a problem.
Concentrate on one market only
Especially in the beginning, it would be wise to focus just on one market, preferably currencies. You want to become a trader who can increase your account balance. Switching from one asset to another will not help you to reach your goal. But trading only one instrument will allow you to know the market well and to apply the strategy that works.
When you understand the market and have some experience in it, you become faster, your decisions are more accurate and you feel comfortable trading. This is a good way to increase your likelihood of succeeding.
Although in this industry, the only guarantee is hard work! There is no magic formula, you will experience some losses and you just have to accept it sometimes.
I wish you an enjoyable experience!
