Traders are not the best at regulating their feelings. For almost every human being, this is the only reason why Forex trading is difficult, and there is a good reason for this.
1. Chasing the market higher
Most Forex traders understand that at all-time highs, they should not pile into a trade as there is a huge possibility that the market has peaked and the currency pair is likely to begin to fall. Traders are also aware that there is a high likelihood that the momentum behind the move is dissipating, making it a lower-probability trade, even if the market has not peaked. However, because they do not want to miss out on such a huge move as other traders make money, they still buy at or near all-time highs. Therefore, as the market tops, traders enter such trades and make quick losses and begin to fall exactly as most successful traders predict.
2. Revenge trading
As they attempt to recover the lost funds, traders who have just made losses are likely to enter new trades immediately after their losses. Many times, revenge trades do not work out, and by taking low-probability trades, they end up losing even more money.
3. Not following your trading plan
Another major reason why Forex trading is difficult is that, as market conditions change, most traders have a difficult time sticking to their well-thought-out trading plans.
A huge reason why most Forex traders find it difficult to trade is because, also known as greed, they fall prey to the desire to get rich quickly from trading. Most traders understand that greed is not a good emotion, and that because of greed, many successful traders have seen their downfall. On many occasions, almost every trader has fallen victim to this emotion.
Fear and greed are closely related emotions, and as investors move from being greedy to very fearful, they are the reason why bull markets are followed by bear markets. Greed will drive you to turn small losses into large losses, while you will be driven by fear to leave a profitable trade with lower profits than if you held the trade much longer.
It is now very obvious that the only reason why Forex trading is difficult is that we are not good at controlling our feelings as humans and making decisions based solely on logic. As you learn from your errors and from other traders who are profitable Forex traders, the journey to become a successful trader is mostly a journey of self-mastery.