Why Do Most Traders Lose MOney?

M

McCloud

I am sure this subject has been discussed many times in the past and also in different threads, but I thought it would be interesting to discuss it again as trader’s input on the subject should always be helpful to all.

Whether you are currently losing money or have losing periods, or whether you have put that period totally behind you, your thoughts and opinions and your experience would be helpful to many other traders so please do not hesitate to post them.

There are probably many reasons why traders lose money and each trader’s experience may be different than the other. Some in general think the markets are random and chaotic and it is not possible to make consistent profits in trading. Others while believe it is possible to make consistent profits in trading, attribute the losses to many other factors, below are some reasons that come to mind in no specific order:

Lack of discipline , overtrading, mental barriers and emotional trading ( fear & greed etc.), mental bias towards the direction, noise (news, financial media etc.), lack of experience, being undercapitalize, money management, not having a good strategy or not being able to follow a strategy or a system, counter trend trading etc.

Why do you think most traders lose money? Is there a single most important reason that can be pointed out or are there many different factors that are to blame?

Thanks and looking forwards to your comments and insight!
 
Most people who try to trade just plain suck. I'd love to be a pro golfer. I can't even hit a ball off a tee. I bet if I took lessons and practiced my ass off for a year I'd still never break 110. You can't teach someone structure and market logic. Many are called, few are chosen.
 
By my experience, the reason is always the same, which is psychological. Most losers I know always look for something better (I was doing the same, so it`s very well remembered how it worked :) ).
My belief is that, through the experience, market acceptance comes in. With all these "dos and don`ts". No matter how You call it, chaotic, patterned, waved, - whatever, You can understand Your position. If You don`t - You lose.
 
Don't take it this way: "what's the SINGLE most important element"... Many things are important. All above in your poll.
 
I am surprised that money management does not have more votes.

I think proper money management is the cornerstone to having a successful trading career.
 
Everyone make mistakes when learning something new.
But can you afford it until you have master the basic skill set?

Thus with enough starting capital and an open mind,
one can slowly pick up the correct skill set.

You may not be the best, but you can stand on your own
calling yourself a trader.

The dilemma is, when one is so well capitalize, then
he/she can effectively retire now - why trade :cool:
 
Lack of Discipline covers most of the reasons why losing traders lose.If your disciplined and have good money management then under capitalization might get you.
 
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