Why Do Most Traders Lose MOney?

this is a great thread...

i think that one thing that most people completely overlook is the fact that you always get a fill when you're wrong, but only get a fill maybe 30% of the time when you're right...

any schmuck can look at a chart and say "I want to buy there" but how many can actually get filled at a good price which lets them use a good stop?
 
Quote from quicktrader12:

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.
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The reason it does not have more votes... is perhaps because many don't even know what it actually means! Some think it's sorta kinda like balancing your check book every few months.

b.t.w. imho, the answer is all of the above... just in diffferent proportions. One gets' his/her fear under better control but starts overtrading... then improves discipline for a while, only to have greed occur in the form of larger size... which causes more fear... and etc. etc. And all this occurs within a framework of no plan or goal..... or one that is flawed in different respects.

Ice:cool:
 
I'd have to vote on 1 and 2 overtrading and being undercapitalized. For a daytrader to think that he/she can make 10K or 20K on a 5K account is crazy.

Many people who open futures accounts for 5K try to use trading tactics that are designed for great results. Both risky and unrealistic trading plans are employed in order to get these types of results.

Trading plans that result in overtrading by using a small trading account fail more often than not. :cool:
 
Quote from spreadem:

I'd have to vote on 1 and 2 overtrading and being undercapitalized. For a daytrader to think that he/she can make 10K or 20K on a 5K account is crazy.

Many people who open futures accounts for 5K try to use trading tactics that are designed for great results. Both risky and unrealistic trading plans are employed in order to get these types of results.

Trading plans that result in overtrading by using a small trading account fail more often than not. :cool:
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I gotta agree, 5k is not a great starting point... but $20k is doable... when I started, I started with no more than $20k in my account, and I have managed to make a good living out of this game... the bubble probably had something to do with the fact that my account grew very large very quickly (if I hadn't started out when I had, I may very possibly not be trading these days... I was totally crap when I started out, but the market was awesome, which meant that even idiots could make great money)... looking back with some satisfaction, I can make my starting out account value these days in a less than average month...

I would say that most traders lose money cos of:
1) not starting with enough
AND/OR
2) starting with enough but having to contend with relatively shit market conditions that slow bleed em to death
AND/OR
3) paying little attention to STRICTLY keeping their stops...

I don't understand why trading conditions are not included in the poll... many people are saying that others should stop complaining about poor market conditions... to me it was the great market conditions which ensured my longevity, by giving me enough capital to get through tougher times later on, and by giving me enough capital to learn how to trade the tough times... I feel a degree of sympathy towards newbies starting out in these conditions.... yes it will be great training for the better times, but survival until those better times arrive is gonna be much, much more difficult...
 
Quote from OddTrader:



To summarise the fifty reasons, there is only one keyword: a plan - its design and execution.
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And the commitment to stick with it - consistency, consistency, consistency!
I have not said enough - CONSISTENCY. :)
 
Quote from bungrider:

this is a great thread...

i think that one thing that most people completely overlook is the fact that you always get a fill when you're wrong, but only get a fill maybe 30% of the time when you're right...

any schmuck can look at a chart and say "I want to buy there" but how many can actually get filled at a good price which lets them use a good stop?
More...

Excellent , Excellent point. I have a quote in my trading journal which i put in a ways back that says "losing trades are always filled". I did this because I used to have a problem of playing market maker when a good trade came along and usually missing out. Now if I like something,I hit the bid or take the offer.

I also trade a bigger time frame, but for me it was necessary to get the consistency of "getting filled on winners".
 
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