why forex traders lose money

Forex is a zero-sum game. Retail traders lose to professional well-informed traders. Only a small percentage can compete with market makers. As some already pointed out, high leverage combined with bad money management contribute mostly to the failure rate.

Technically Forex is a zero-sum game, so I apologize for the misleading title, but hear me out. Forex is a zero-sum game, but that means nothing for us retail traders trying to make a profit. You see the biggest players on the Forex market, such as corporations, are making ridiculously large transactions all the time. The thing is, these transactions are generally NOT for profit, but rather just necessary currency exchanges required for regular international business dealings. What this means is, these large corporations knowingly take a loss in the Forex market in exchange for a larger gain in other markets. As a result of these massive transactions and massive losses, there is plenty of room for every single retail trader to profit. So the next time you hear someone say, "Forex is a zero-sum game", just say, "Yes, but remember, not everyone is playing for profit".
courtesy of babypips