What's the Biggest Reason Why Traders Fail?
- Thread starter schizo
- Start date
Hello taowave,
Yes, I am definitely an ES Future Market Master., Once I get my account to $1 million, then I will be promoted to ES Future Market OWNER!!!
Sir, these days $1 million is nothing. You need to aim higher.
Pocket change.
I have a unique skillset using software which the largest exchanges and finance houses implement with many years experience, paying $1200-$1500/day usually, this past week an agent came to me of some consulting using it, on asking the relevant questions it was $500/day, pointed out were they looking for juniors with no experience, apparently not, this is the state of mid-tier firms these days.
Now, you would expect starting very early out of university at $200k per year that level of knowledge would be welcomed in places like this, especially given the financial markets are HNW and above playgrounds and everybody wants to be like Mike, and yet the amount of abuse received is quit spectacular, which comes to the point why most people fail especially in the financial markets, of which position sizing is a subset where most try to punch above their weight.
Someone said the other day you speak like you're poor, and instantly anyone who knows how to trade outside an institution can see those saying that are extremely poor traders themselves, when you have an institution they receive endless amounts of money from clients and central entities, they can live the rich life and succeed, not so much these days but they can.
For hedge funds their primary goal is not returns but protection of capital, think emperor penguins, strength in numbers, the returns as long as in line with S&P become secondary, the fund managers lifestyles can be good but not excessive to alienate their investors, however for individual traders they have one and only one key advantage.
Individual traders can act resourceless.
Obviously you need the experience, the knowledge, the technology, the patience, but acting resourceless means the markets will leave you alone to do your thing, unfortunately families have a different view but that's something else, so at HNW on 20% per year and you trade from the start of year on an exponential curve building up, you have an advantage no one else has, now imagine doing that but having access to institutional fintech and knowledge at UHNW levels with algos that induce calm, things become a little more interesting.
And this was the tough part of the journey that I had, $200,000 returns per year (consulting / trading profits on $1million capital ) is a relatively easy step, however above $200,000 per year the levels of calm required become exponential, on Friday you go shopping, Saturday is cooking day for the next week, Sunday is rest day, Monday to Thursdays are trading days where you try not to screw up otherwise you lose the week, everything is cooked at home using high quality ingredients, you wake up at a good hour, cook some food, let the markets come to you, take the dog for a walk.
Then a public holiday comes along so you only get 40weeks trading per year, above $200,000 per year returns is intensely difficult with less than $1million or 20% of net worth as capital, it's a lifestyle very few have ever heard about, let alone experienced, everyone on these sites talk the talk, but unless they discuss lifestyle at HNW with calm and patience then the reason why traders fail is hidden in obscurity, a few make $1,000s or $10,000s profits as supplemental income, but those making $100,000s from capital and/or lifestyle really don't exist on these sites simply because people would have more dignity in what they were saying to those that have, can, and do create those returns.
Now, you would expect starting very early out of university at $200k per year that level of knowledge would be welcomed in places like this, especially given the financial markets are HNW and above playgrounds and everybody wants to be like Mike, and yet the amount of abuse received is quit spectacular, which comes to the point why most people fail especially in the financial markets, of which position sizing is a subset where most try to punch above their weight.
Someone said the other day you speak like you're poor, and instantly anyone who knows how to trade outside an institution can see those saying that are extremely poor traders themselves, when you have an institution they receive endless amounts of money from clients and central entities, they can live the rich life and succeed, not so much these days but they can.
For hedge funds their primary goal is not returns but protection of capital, think emperor penguins, strength in numbers, the returns as long as in line with S&P become secondary, the fund managers lifestyles can be good but not excessive to alienate their investors, however for individual traders they have one and only one key advantage.
Individual traders can act resourceless.
Obviously you need the experience, the knowledge, the technology, the patience, but acting resourceless means the markets will leave you alone to do your thing, unfortunately families have a different view but that's something else, so at HNW on 20% per year and you trade from the start of year on an exponential curve building up, you have an advantage no one else has, now imagine doing that but having access to institutional fintech and knowledge at UHNW levels with algos that induce calm, things become a little more interesting.
And this was the tough part of the journey that I had, $200,000 returns per year (consulting / trading profits on $1million capital ) is a relatively easy step, however above $200,000 per year the levels of calm required become exponential, on Friday you go shopping, Saturday is cooking day for the next week, Sunday is rest day, Monday to Thursdays are trading days where you try not to screw up otherwise you lose the week, everything is cooked at home using high quality ingredients, you wake up at a good hour, cook some food, let the markets come to you, take the dog for a walk.
Then a public holiday comes along so you only get 40weeks trading per year, above $200,000 per year returns is intensely difficult with less than $1million or 20% of net worth as capital, it's a lifestyle very few have ever heard about, let alone experienced, everyone on these sites talk the talk, but unless they discuss lifestyle at HNW with calm and patience then the reason why traders fail is hidden in obscurity, a few make $1,000s or $10,000s profits as supplemental income, but those making $100,000s from capital and/or lifestyle really don't exist on these sites simply because people would have more dignity in what they were saying to those that have, can, and do create those returns.
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After reading through this thread, Ironchef, I think you do have an edge -- you are trading small and winning small. You just struggle with the emotions even at "no real risk" trading. If you can conquer that and can develop the confidence to relax I think you can do it on a bigger scale.
As far as SML. Man how do you guys take this? I do not have anyone blocked but the more he shows up with his nonsense -- "quit reading books and profits will flow" well I may have to block him.
To get back to the real question of this thread. The number one reason that traders fail is:
Position Bias: When you have a position on you no longer have the ability to view the market as it is. When you are riding a profit, any setback will be recovered -- the market cannot turn against me now. When you have a loss, every little blip back to your direction confirms you were right. Even when you recover 80% of a loss you cannot see that it is time to say Thank You. Position Bias breeds hoping. When you begin "hoping" the maket to confirm your position you are screwed on this trade and you at at the market's mercy. It is controlling you and you are not managing your trades.
As far as SML. Man how do you guys take this? I do not have anyone blocked but the more he shows up with his nonsense -- "quit reading books and profits will flow" well I may have to block him.
To get back to the real question of this thread. The number one reason that traders fail is:
Position Bias: When you have a position on you no longer have the ability to view the market as it is. When you are riding a profit, any setback will be recovered -- the market cannot turn against me now. When you have a loss, every little blip back to your direction confirms you were right. Even when you recover 80% of a loss you cannot see that it is time to say Thank You. Position Bias breeds hoping. When you begin "hoping" the maket to confirm your position you are screwed on this trade and you at at the market's mercy. It is controlling you and you are not managing your trades.
Hello ironchef,
I understand what you mean. I understand.
I have to get to a million first. That's my biggest challenge right now in my trading. But I'm working on it.
%%
20% must not be easy, any amount of money;
so few long term , beat a benchmark like SPY, which averages 11-12%, depending on start date.
But quite a few businesses do better than 12 %,or 20%, but thats among the 20% that stay in business.
But if you are one
of those that cant stand to work for some else, you may be in tthat 20%/congrats.
Thanks.-murray TT