Why do traders fail?

i think novice traders lose because they do not understand that markets either trend or correct: this rapid change confuses them.

They also listen to all the experts who tell them that trading is risk management.

They do not use their own intelligence and observe the markets

Markets always gives clear indication of the direction they are going;that is a matter of observation and the only risk is in not observing this.

markets do not play with dice
 
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Buy1Sell2 said:
Traders fail because they don't prudently manage risk---period.
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it is a big part of it..but there are other parts also..no experience..naive..bit slow..lazy..easily led..and so on..but I have to agree..a dumb ass trader with good risk management can make money..once he keeps his bets small and learns from his mistakes..adjusting his entries and exits until he is happy he now knows what trading is all about.. identifying low risk entries and never betting the farm!
 
sillyw10 said:
it is a big part of it..but there are other parts also..no experience..naive..bit slow..lazy..easily led..and so on..but I have to agree..a dumb ass trader with good risk management can make money..once he keeps his bets small and learns from his mistakes..adjusting his entries and exits until he is happy he now knows what trading is all about.. identifying low risk entries and never betting the farm!
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Bingo
 
experienced traders know that the market trends or corrects but where they may go wrong is in not recognizing that sometimes, the market trends inside a larger corrective move,which may run stops and turn viciously for no apparent reason.

experienced traders also make the mistake of focusing on systems, on secretive patterns, strategies with mysterious and esoteric reasoning, theories like elliot wave or demark or Brooks price action or indicators.

another mistake is chasing markets and expecting continuation moves too soon without allowing enough time for the corrective moves to finish.

I should be realised that corrective move take longer, than the trend moves, to finish, sometimes, as much as 7-15 times as long,often even longer .
Getting in early will result in stops being hit- sometimes 2-3 times -and this is why traders think someone is gunning for their stops.


when all that is necessary in trading is to find a strong move and look to enter on the less strong corrective move.....which always comes.
 
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I traded prop for a short period of time quite some while ago. I witnessed several blow-ups.
One occurred with a brash trader who refused to close an obviously losing position when the market reversed from bearish to bullish during the course of the day. He was mombo short....and kept increasing his position. He lost his entire account in one trade.

The other blow-ups were slow burn downs...due to poor percent winners ratio. They just continued to lose and lose....and then their accounts were near-zero.
Me ? I traded only very occasionally ...and got out of there break-even....with my capital intact.
 
syswizard said:
I traded prop for a short period of time quite some while ago. I witnessed several blow-ups.
One occurred with a brash trader who refused to close an obviously losing position when the market reversed from bearish to bullish during the course of the day. He was mombo short....and kept increasing his position. He lost his entire account in one trade.

The other blow-ups were slow burn downs...due to poor percent winners ratio. They just continued to lose and lose....and then their accounts were near-zero.
Me ? I traded only very occasionally ...and got out of there break-even....with my capital intact.
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there are plenty of such stories....where people without a clue to the reality of markets, get into business and it is not only reserved for those in Wall street but in main street as well.
90% of new business-in all sectors of the economy- close in the first year....

The main reason is total lack of market knowledge
 
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syswizard said:
I traded prop for a short period of time quite some while ago. I witnessed several blow-ups.
One occurred with a brash trader who refused to close an obviously losing position when the market reversed from bearish to bullish during the course of the day. He was mombo short....and kept increasing his position. He lost his entire account in one trade.

The other blow-ups were slow burn downs...due to poor percent winners ratio. They just continued to lose and lose....and then their accounts were near-zero.
Me ? I traded only very occasionally ...and got out of there break-even....with my capital intact.
More...
it is not trading that makes money but understanding markets
 
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