Why are there so many losers?

Hey:

I am watching Miami kick Washington's ass again, and thought I would type a quick post.

In answer to the question, the basic skills are easy to identify and can be learned. For the average retail trader, the problem is that often they are eager to put money at risk before they have these skills in hand. After that it is a matter of putting together a valid trading concept and pairing it with smart money management and position sizing rules. Finally, one has to develop emotional control, judgement and discipline. Unfortunately these assets cannot be "learned" during a 3 day course of study sold by a vendor, nor can they be learned from a DVD or manual. In my opinion, they have to be learned by hard experience.

One more thing to think about. Has anyone noticed that there are many courses sold to the retail trader, promising to teach them to trade, but no course (I know of none) to train traders to research and analyze (use basic parametric statistics). The significance of this is simple. You can't make money consistently without an edge, and you cant find that edge unless you do the research. The reason there are no courses to teach that is that it is a "hard sell". Traders don't want to pay to learn that skill. Instead they are willing to spend $3,000 to go to a weekend clinic where the promoter promises that they will earn a fortune within the next month "guaranteed".

I think it is pretty clear why there are so many "losers" and if you just read the posts here on ET, you can pretty much see who they are.

Good luck on Monday
Lefty
 
I think the main reason people are losing is the law of large numbers. Just like in Black Jack even if you are counting cards you may hit a rough spot and lose when you thought you were going to win. You need to have a big enough bank roll to weather the storm. Most people do not have that luxury. All other factors matter like skills, money management but at the end of the day you have to be able to weather a storm.
 
don't even post these threads, let alone read them

either just go for it or forget it

with than mantra I should just log off right now, just something about messageboards that keep you coming back....
 
Quote from Steve Tvardek:

We talk all the time and I know why it is that he can make what he does. He has a much greater tolerance for risk than I do right now and he will really size in in the right situations. I may have 1000 shares and catch 40 cents and be somewhat happy, but he wont be happy unless he catches the same move with 6000 shares. He does take big hits here and there when he is wrong, but net/net he makes a ton more than me. And that really is what counts in the end. I know, that me and me alone, is what needs to be worked on. We see the same trade and believe the same results will occur but I cant bring myself to sizing up enough yet to take full advantage. For him, its no big deal.
So while he is very open about how he trades and why he does certain things, actually aligning myself with his belief system is very very difficult. I guess the only way to get to that next level is to force myself to do things that feel uncomfortable for a greater good.
More...


perhaps he trusts himself more than you trust yourself? To me that is the key.


ICe
:cool:
 
Quote from cashonly:

In my experience of working with hundreds of traders, one answer is that traders don't take their trading seriously enough. They take a class and then start trading without really taking the time to learn their craft.

What would the world be like if all professions did that:
Brain Surgeons?
Lawyers?
Engineers?
Airline Pilots?
Stand-up comics?
Chefs?

You get the idea. It doesn't matter what the profession. If you don't take the time to study and learn and practice in your profession, you'll fail. All of the above put in a long time in either school, apprenticing, or on-the-job-training, but they put the time in. You rarely here them saying, "Hey! I took a course! Why can't I:
"dissect a brain without someone dying?"
"win a case?"
"build a bridge that doesn't fall down?"
"land a plane without crashing?"
"make people laugh?"
"make everything I cook taste good?"
More...

what's the saying: an "overnight success" takes like 10 or more years... something like that....!
 
24% a year? i hope you never become a fund manager.
Fund managers make 24% of the trading capital, not on
the trading equity.

If he makes $1200 in a year, that's around 2.5% return
, better put money in bank CD than to trade

I learned something. If you make $1200 a year from your $5000,it is not 24% ,it is only 2.4% and you better put your money in CD:D
That is a great proof that 99% lose money because they can not do the math and they are too ambitious and they want 80% to 4000% a year. If it was possible, I were the first person who could acheive it. I have made 50% to 65% in the last 5 years constantly and I am very happy with my return and I know many people will not be able to achieve my result.The reason that I get that good result, is that I will be happy with 15% return in a year so I get higher than that. If I wanted 400%, I would end up getting nothing and losing money
 
You are probably right. He has always been an aggressive trader and therefore learned how to take hits early on and to trust himself that he could make it back. This, I feel, helped him become a ballsy and fearless trader. He also has incredible tape reading skills so you can imagine how successful one can be with that combination.
I, on the other hand, started off cautious and risk averse and therefore built my trading strategy around that. My results are very good for how cautious I am and the money I am making is very good for a 26yr old. Unfortunately I have been very unhappy with myself lately fully realizing that I need to be less cautious and more aggressive to really break out and excel. I feel like my earning potential is now capped unless I step it up and leave my comfort zone.
Anyways, I took a few bong hits before I wrote this. Feels good to be honest with myself :D

Quote from iceman1:

perhaps he trusts himself more than you trust yourself? To me that is the key.


ICe
:cool:
More...
 
Steve I was in your boat I was capping at around 10 grand a month (maybe a little more) while others around me including people that I trained were making 5 times more.

I would reflect on the market wizards books about risk, and wanting to stick around in case of a serious event. Wrong....

I would say if you are short term trading with an edge --- you need to step it up very fast. You must put money in the bank in large amounts while you have an edge because your edge could go away.

Mine did. I had some money to buy a house and invest in real estate. But I should have been able to put a few mill in the bank with the edge I had.

If you wind up every day positive or 3-4 out of five days positive and your winning days are bigger than your losing days. Step it up.

But if you start losing back it off quickly.

I walked away with a bunch of cash. Some of the guys who were making 5 times more than me walked away with nothing after losing big month after month.
 
Thanks for the advice, I plan on stepping it up very soon.

How did you break out?

Quote from jem:

Steve I was in your boat I was capping at around 10 grand a month (maybe a little more) while others around me including people that I trained were making 5 times more.

I would reflect on the market wizards books about risk, and wanting to stick around in case of a serious event. Wrong....

I would say if you are short term trading with an edge --- you need to step it up very fast. You must put money in the bank in large amounts while you have an edge because your edge could go away.

Mine did. I had some money to buy a house and invest in real estate. But I should have been able to put a few mill in the bank with the edge I had.

If you wind up every day positive or 3-4 out of five days positive and your winning days are bigger than your losing days. Step it up.

But if you start losing back it off quickly.

I walked away with a bunch of cash. Some of the guys who were making 5 times more than me walked away with nothing after losing big month after month.
More...
 
There are numerous reasons why people fail:

-Most people fail trying to lose weight, trying to start a business. Trading is no different than anything else. Most people don't have the discipline to lose weight (although everyone knows what the answer is, it's just diet and exercise). Trading is much more confusing.

-Most of the people giving advice about trading have never beaten the market long term. It's like a .250 hitter trying to tell you how to hit .400.

-Most traders have only hit one type of pitch. In the late 90's, it was like hitting fastballs. In choppy markets, bear markets and low volatility markets....you'll see curve balls, change ups and sliders. Most traders don't have contigency plans for these types of conditions.

-It's also the law of averages. By definition, not everyone can beat the market all of the time.

Those with the strongest advantages come out on top.
 
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