Why Over 90% of all Traders Lose their Money on Pocket Option
Over 90% of Traders lose money on Pocket Option. But why and how can you join the 10% that make money?
Pocket Option states that up to 90% of the active accounts lose money. That means about 10% of all active accounts make money on the platform. The truth is, many losing traders dont plan to lose their cash.
In fact, they do make some winning trades every once in a while. However, their winning trades wont make enough money to offset losses. But why does such a high percentage of traders lose money?
The main reason why traders lose money is inconsistency. They know dozens of trading strategies and try to use them in every market they trade. They also trade several markets at the same time.
They will also rarely follow through on their trading plans. Sound familiar? All of these coupled together will eventually lead to huge losses.
One of the main reasons you will lose your money is trying out too many trading strategies. Consider this scenario. Youve discovered a hot trading strategy online and decide to apply it to your trades.
The first few trades are winners. Then you decide to invest more money in your next trade. It loses. Frustrated, you write the strategy off as luck and go in search of a new trading strategy.
Wouldnt it have been easier to identify what actually made the strategy work? You might find out that it works best in specific market conditions (trending or ranging). Now that you know what guarantees losses when trading on the Pocket Option platform, how do 10% of traders make money?
The reason why only 10% of traders make money on Pocket Option
Consistency is the main reason why only 10% of traders actually make money on Pocket Option. But consistency in what? For starters, these traders will choose a trading strategy that has been proven to make profits.
No trading strategy is superior to the other. Its how and where the strategy is applied that matters. That said, traders who make money only have a few trading strategies.
Each is applied on a specific market. For example, one strategy is used in currencies markets and only when the prices are trending.
That same strategy cannot be used in commodities markets when the prices are ranging. This means that successful traders understand that what works in one market wont necessarily work in another.
Steps to take to become a successful Pocket Option trader
The first thing to always do when you come across a new trading strategy is to test it in your demo account. Not once, but several times in different markets.
Keep the trading strategies that work best for you. Also, decide on the markets you want to trade in. I would recommend just a few related markets.
For example, if you prefer commodities you could choose gold and silver, if you prefer currencies, you could choose just a few pairs. Why? Choosing a few markets to trade in gives you the chance to study them.
With time, you can instinctively know how a market is likely to move just by looking at its charts. And thats an advantage you will have over 90% of the unsuccessful traders.
Your next step should be choosing the appropriate money management strategies as well as the timing of your trades. I usually, use 5 minute candles when entering trades that last between 15 and 30 minutes.
This makes technical analysis easier. The trading indicators and chart type you use are also important. You can use candle charts which are easy to read.
Money management involves deciding both how much to trade and how to protect your capital. Trading a small fraction of your account each time ensures that you have some money left to trade if that trade doesnt win. Applying stop losses also helps to protect your capital.
As mentioned, no trading strategy is superior to another. Success as a trader is the result of consistency in selecting the appropriate strategy and using it in the right markets. Its also about capital and emotional management.
Understand which market youre trading in
You should choose a specific market to trade in. This article will show you how: Instructions for choosing the safest currency pair to trade at Pocket Option.
Understanding the market youre trading in simply involves following the most recent price movements.
Simply looking at the price charts can give you an idea whether the market is in an uptrend, downtrend or ranging. With this information, you can decide whether to enter a trade or sit back until the markets are more favorable for trading using your particular strategy.
When to trade is as important as when not to trade. The markets coupled with your trading strategy should give you an idea about when its most appropriate to enter into a trading position.
Why should you trade just one market on Pocket Option when starting out?
If youre starting out, I would recommend trading with one financial instrument and preferably a currency pair. Why? You primary objective should be to make money.
Trading several instruments at a time wont make you money. However, the probability of making money increases if you have a better understanding of the markets as well as using the appropriate Pocket Option trading strategy.
Focusing on one financial instrument makes it easier to identify the trading strategy that makes money in that market. In addition, youll have a better understanding about the time when the markets are best for trading.
As such, you will be more confident every time you enter any trades.