I've noticed a disturbing commonality among unsuccessful traders. Mainly, that losses are 'no big deal' and 'part of the game'.
While taking small losses can be a valid part of a well oiled, robust and highly successful professional trading system... the idea that losses are 'acceptable' seems to be distorted in the minds of unsuccessful traders. New traders are conditioned almost from day one by books and by peers to view losses as just part of the game. While this may technically be true, the message is misinterpreted by new (and many old) traders to be... that losses are much less of a big deal than they actually are.
The net result is that traders do not make every conceivable effort to AVOID losses in the first place. Traders typically skip this step entirely and jump right into the next step which is 'limiting' losses. New traders are not taught that losses are the LAST thing you want and that you should move heaven and earth to develop a trading system that is not constantly pummeled by losses, if at all possible. If it's not possible to avoid losses, fine. Of course. Deal with it. Factor it in. But if you take the attitude from day one that losses are horrific (rather than 'just part of the game') and should be avoided at every turn if possible... you will be more keen, more cautious, in developing a system that makes avoiding losses in the first place a priority.
Ultimately what happens to new traders is that they grow accustomed to losses. Many even cherish their big losses and trot them out in conversations as proof that they 'have what it takes' and have 'paid their dues' and are now ready to make some real money. But when the next horrific loss comes it's like the bucket of ice cold water that is dumped on their heads does not shock them. It actually excites and refreshes them. They rage at God, then immediately shake it off and write another Visa check to refund their accounts. Their attitude about losses is unhealthy and self defeating. Losses are horrible. Take them ONLY if you must. Even if losses are 'part of the game' don't look at them that way. A trader should do everything in his power to rig up a trading system that avoids losses whenever possible and keeps any losses that do sneak through to the bare minimum.
Thoughts and comments welcome.
I do not see the point to discuss psychology of the people who do not know what they are doing. Some sort of masochism...
Why they still trading?
Because they were told that anyone can do it.. just read this book, or listen to this mentor.. and you will develop an edge..
Edge my a$$....
Instead, some one should tell him: "Buddy, you know nothing, and you probably never will know enough to trade better than most. And while you are like everybody else, you are a sucker... like everybody else... Keep that in mind !"