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Forex: Why traders lose money?


The fundamental question in the world of the Forex market is: Why do traders lose money? In this article we will explain.

Financial trading on Forex has become something that many treat lightly, but very few really master.

When they start, most beginning traders have a lot of bumps on their way in the Forex market. And although it seems that the culprit for everything is the same actor, you cannot always blame “market fluctuations”.

Kiana Dianal tries to answer why traders lose money

The golden question for those who want to enter the world of the Forex market is: how to be a good trader and not lose money?

Kiana Dianal is the CEO of Invest Diva, a finance expert who writes for Nasdaq,, and

She, in her three books on cryptocurrencies and the Forex market, tries to guide beginners who decide to venture into the currency market, guiding their steps based on their years of experience.

Kiana, the Forex conference that is held worldwide called, “Trading Mastery Summit”, held in Madrid in 2016, explained to the observers of her presentation what she identified as the problems of “beginning traders”.

She mentioned the risk factors that she considered influence trading. There are 11 risk factors that haunt traders, but can be summarized in the main 4.

Kiana Dianal

Risk Factors for Beginners

The first of these factors, according to Kiana, is that beginners consider it to be a scheme to become a quick millionaire. When reality is much deeper than that simple assumption.

The reality is that it is a gradual process. Something like a machine to manage your wealth. It needs to be geared in detail and be aware of each element that constitutes it. And beginning traders lose money by not understanding this.

This first factor allows the existence of the second. The emotional charge is also part of the error, because it puts too much mind on it, and emotions interfere and complicate operations.

Well, when observing a rise, beginners rush to sell all their assets, losing large amounts when a decline begins quickly.

The third is a basic thing to learn, and that is trusting the data. Well, some beginners bet everything upon learning that some relevant currency in the market had a loss and rush to operate as soon as possible, losing a lot of money, for not analyzing well.

A perfect balance between technical and fundamental analysis is necessary, Kiana explains.

The fourth is a lack of financial education. For this reason, it is important to analyze the market from various approaches: Technical, fundamental, evaluating market sentiment, evaluating the Forex market environment with your own criteria. And always keep a clear mind, she emphasizes in her talk.

The importance of knowing your finances

It is also important to keep in mind your financial situation when deciding to invest in the Forex market. Since this will depend on your positive performance when trading on Forex. This is based on capital analysis.

Much of the expenses that we carry out are connected with an emotional charge, so it is important to ask, why is it spent? And what is it spent for? The constant answer is: to make money.

But making money is not simple, and that is the common mistake. It depends on a well organized scheme, well set goals. Where do I want to go? What I want to do?

A financial plan is Kiana’s primary solution.

When do you need a financial plan in your life? He asked at the conference, and although doubts among the public were present, and you probably have the same question, the answer is simple: Right now.

As you read this article, when reading a book, even when you’re at work. A financial plan is the initial and fundamental step for your life, and much more if you want to enter the Forex market.

What should I take into account to start my journey in Forex?

Kiana explained that all the factors that are part of your daily economy are the elements to consider.

Keep in mind your current salary, the situation of your family, outstanding debts, and stability in your residence. Since this will allow knowing how much you can trade in Forex, taking into account these risk factors.

Since, the most common and catastrophic mistake is to ignore the risks associated with investing. It doesn’t matter how much money you start with. According to Kiana, you need to get off to a good start in Forex and manage your finances well.

You need to have some prepared risk management mechanisms in place that work to protect you if things go against you, and this seeks financial planning.

Kiana explains that there are 4 different ways to approach approaches to your financial planning, and it should always be tailored for you, and we’ll briefly summarize them here.

How to approach financial planning? 4 simple ways

Life cycle approach: The fundamental factors that influence this approach depend a lot on your age, your marital status, and the family income of each contributor in the family nucleus. Employment status, if you are self-employed or depend on a company or entity that pays your salary.

Two-step metric approach: This focuses on risk factors, savings and investments, aimed at personal focus. Considering how your family is, the financial situation.

It is applied according to a formula that Kiana clarifies in her book. This formula obtains the metrics of your annual income, resulting in two ranges.

If your income is above 36%, you can invest in Forex.

But if they are below 28%, you should not invest in Forex, since it means that, at the time of a loss, you could risk bankruptcy and you would not have a security fund to settle that event.

Why do beginner traders lose money on the Forex market? Kiana Dianal explains one of the factors that cause such a scenario.
Why do beginner traders lose money on the Forex market? Kiana Dianal explains one of the factors that cause such a scenario. Source: Trading Mastery Summit

Managing your own debts is the first step to take before investing in the market.

Debts are classified, according to Kiana, into three types: positive debts, reasonable debts and negative debts. In his book “Guide to how to make money in Forex” he clarifies step by step how to differentiate these debts and manage them, to obtain extraordinary results.

Invest in Forex yes or no?

It is crucial for those who want to enter the world of Forex for the first time, to keep in mind that this stock market is complex.

Ask yourself, why do traders lose money? It is also important, because it will let you know what mistakes not to make.

It cannot be considered a “get-rich-quick scheme”; it is an investment structure that carries pressure. Both psychological and financial, and should be treated appropriately.

In addition to that, every Forex market trader (whether veteran or not), has to understand that both consistency and patience are the key to success in this field.

The key, according to Kiana’s scheme is: Make money, make sure that your money is generating more money and repeat this process.

And finally, trust that things will turn out well, because for Kiana, the theory of attraction, which explains that everything you think attracts you, is essential when deciding to venture into Forex.

Reliable sources

The information in this content has been extracted from reliable sources detailed below:

1- Professional handling of content by the authors of CriptoTendencia.
2- Kiana Dianal Conference at the “Trading Mastery Summit”.

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