Why do traders fail?

[dbphoenix]

I know the serious traders on ET, the ones who really trade and make upwards of $40K a day, would never reveal their edges on a public forum, but I'll step up to the plate yet again and share how I do it:

1. Wait for clarity. (Al Brooks)

2. The trend is your friend. (Unknown)

3. Cut your losses short and let your winners run. (Unknown)

Now how can you fail when you trade basic price action and follows those rules?



By the way, Happy April to everyone!

I've wondered the same thing, for years. Perhaps the key word is "follow".

A happy April to you, too, in spite of everything.

 

[game]

So many kind words this evening...thank you, too

You know, I learned to limit those losing days by following the rules of the Master of Masters, Warren Buffet:

Rule no. 1: Never lose money.

Rule No. 2: Never forget rule No. 1.


There's really not much to profitable trading once you read everything out there in books and on the internet.

I know the serious traders on ET, the ones who really trade and make upwards of $40K a day, would never reveal their edges on a public forum, but I'll step up to the plate yet again and share how I do it:

1. Wait for clarity. (Al Brooks)

2. The trend is your friend. (Unknown)

3. Cut your losses short and let your winners run. (Unknown)

Now how can you fail when you trade basic price action and follows those rules?



By the way, Happy April to everyone!

Was just going through your trades in CL. Could you clarify the first exit at 0655 PST. Should not the Price be $100.85 instead of $101.85 as it is currently showing on the blotter?

 

[smallStops]

Quote:
Originally Posted by smallStops View Post
May be just for a change, you MIGHT want to target just one tick for one full year.
Not getting your point?

Not getting your point?

The situation Cornix talked about was :
- the person put a difficult target for the year, finish overdrawn and then struggle to break-even.
- the person finds it probably easy to make 1 tick in a year


May be for a change, the person could decide just as an experiment to
target just one tick for the year, and see what he can learn from trading with just this target.
Should the person manages to get 1 tick for a full year, aka being break-even, then
the person can then reflect on the lessons to be learned, and look to a higher goal
that is easy to get.

 

[smallStops]

Quote:
Originally Posted by helmholtz View Post
Most traders fail because they don't want to win. They want to hurt themselves by losing so they lose. Simple.
I don't think that's true. They don't want to lose...they want to win. However, I think they need to hurt themselves in order to eventually learn the lesson on how to avoid being too reckless in their trading.

I don't think that's true. They don't want to lose...they want to win. However, I think they need to hurt themselves in order to eventually learn the lesson on how to avoid being too reckless in their trading.

They want to win : this is what they say.
Gamblers are known to say they want to win, but actually, their subconscious wish they lose, and they go on losing, even if they win some , they keep gambling till they lose.
This is why a clinical psychiatrist is , now in my view, the first step someone should take if they want to start trading. I know most start by the methods, etc...

<iframe width="640" height="360" src="//www.youtube.com/embed/wzBVep04LXM?feature=player_detailpage" frameborder="0" allowfullscreen></iframe>
in case you are just getting acquainted with psychology/spirituality

 

[smallStops]

Dear NoDoji:

The coin is perfectly balanced.

Would you play such a game?

PS: Always a pleasure to talk to you, you are a master trader, as far as I can tell

I would play the game with a stop at 100$ loss, and stop at 100$ win.
Aka : as soon as I lose 100$, I stop.
If I win 100$ ( 97$) I take the money then, and stops.
for 97$, I go and see a film.

 

[NoDoji]

Was just going through your trades in CL. Could you clarify the first exit at 0655 PST. Should not the Price be $100.85 instead of $101.85 as it is currently showing on the blotter?

This is why you will succeed at trading. You pay attention to detail

Now tell me what helps you more...blotters and statements...or instructions how to trade?

By the way, Happy April to everyone!

 

[tradingjournals]

Trading is a zero to negative sum activity. The expected outcome is that the majority fails. What is not expected is that a trader would win, and what is expected is that a trader fails. So failing in trading is more likely than winning, and there is nothing one can do about it because it is the nature of trading (negative sum activity): a dollar won from one trader, is a dollar lost by another trader. A dollar won by a broker is a dollar lost by a trader. Numbers do not lie.

 

[ronblack]

Trading is a zero to negative sum activity. The expected outcome is that the majority fails.

Basically I agree with you in the case of counterparty agreements (futures, forex, derivatives, etc.) but this is not true for the stock market in general because of the longer-term winning bias. Stocks reflect equity stake in, hopefully, profitable businesses and move because of related investor expectations. If one goes long the stock of profitable companies and shorts the stock of unprofitable ones and does that systematically with a sound methodology the game is a positive sum because of dividend payments, profit expectations on the long side and negative prospects on the short side.

That being said, Mike Harris has today a good article in his blog about the "backfire effect" most technical traders experience when price goes against their forecasts. IMO this is a major problem with traders in the stock market.

In my experience money can be made in a negative-sum game with appropriate risk and money management. But I agree that only a few succeed at the end.

 

[NoDoji]

Was just going through your trades in CL. Could you clarify the first exit at 0655 PST. Should not the Price be $100.85 instead of $101.85 as it is currently showing on the blotter?

A little challenge strictly for the SLA group during your lunch break. There's another major incongruity on the blotter I posted that should have you scratching your heads.

 

[game]

A little challenge strictly for the SLA group during your lunch break. There's another major incongruity on the blotter I posted that should have you scratching your heads.

That 'Time' and 'Realized P/L' cannot both be ascending at the same time.