Why Traders Fail

[wrbtrader]

I never have a profit target while trading options. When it goes in my favor a few hundred bucks lets say $680 I'd like to close it out but don't, wanting more, then it dips back down to lets say $370, now I'm pissed that I didn't close out at $680 profit and keep holding thinking it'll go back up, then it dips to $140 profit, now I'm really pissed and hold it per spite not giving a damn anymore because I could've just made a weeks salary for me in 15 minutes but didn't take it. Now that $140 profit turns negative and I'm down -$200, then -$300 then -$400 and then before I know it I just lost a weeks salary in that single trade because I didn't take gains when I should have! This is my biggest problem.

You said "I'd like to close it out but don't, wanting more...".

You should do some statistics work on similar like trades as you described to see the actual numbers and their impact on your performance curve.

Sometimes when we see the actual statistics of those numbers, its either enough to encourage good trading habits or enough to stop bad trading habits.

It took me a few years to understand something said by another ET member...

Its common to see profitable traders go broke.

It took me awhile (few years) to fully understand the above statement and its impact on profitability.

 

[Esko]

You said "I'd like to close it out but don't, wanting more...".

You should do some statistics work on similar like trades as you described to see the actual numbers and their impact on your performance curve.

Sometimes when we see the actual statistics of those numbers, its either enough to encourage good trading habits or enough to stop bad trading habits.

It took me a few years to understand something said by another ET member...

Its common to see profitable traders go broke.

It took me awhile (few years) to think about his statement above before I fully understood it.

I feel like it definitely encourages me to keep going and work on my trading habit demons. Thanks for your advice, I lll see if there is a correlation.

 

[themickey]

I feel like it definitely encourages me to keep going and work on my trading habit demons. Thanks for your advice, I lll see if there is a correlation.

Keep your eye on the trade, keep your eye off the money.
I rarely look at profit and loss, I'm obsessed with what the signal of the trade is giving me.
Look at it as if it's a game, play the game, not the money.
Once you have the game right, money takes care of itself.
It's a matter of you switching focus from money to strategy.

 

[volpri]

@Esko (and anyone else)

Correct psychology is the key to successful trading. Three words.

1) equanimity
2) detachment
3) mindfulness

These three items as important, if not no more important, than any system of trading you may have.

You may now begin googling! ROFL

 

[Esko]

@Esko (and anyone else)

Correct psychology is the key to successful trading. Three words.

1) equanimity
2) detachment
3) mindfulness

These three items as important, if not no more important, than any system of trading you may have.

You may now begin googling! ROFL

Right. We repeat what we don't correct.

 

[jk90029]

Why Traders Fail

Not all, but many fails due to hugh accumulated tax+commission!!

 

[algofy]

@Esko (and anyone else)

Correct psychology is the key to successful trading. Three words.

1) equanimity
2) detachment
3) mindfulness

These three items as important, if not no more important, than any system of trading you may have.

You may now begin googling! ROFL

If you don't have a good system, psychology means nothing.

 

[jk90029]

Why Traders Fail

Not all, but many fails due to hugh accumulated tax+commission!!

Almost half of all traders is winning before the expense(tax+comm). However, due to the hugh expense, 90% is losing eventually.

For example, my friend told me he spent 20 years in stock market to find a loss of $500K. In fact, he is now winning IF there was NO expense.
In average, he lost roughly $2K every month. (20Y=240M)

Note that most spend 50 years in stock market, to spend expense more than $1M in cash. (from 30 to 80)

 

[volpri]

If you don't have a good system, psychology means nothing.

Neither does a good system without proper pyschology. A mediocre system with good psychology can be more profitable than a good finely honed system with poor psychology.

 

[algofy]

Neither does a good system without proper pyschology. A mediocre system with good psychology can be more profitable than a good finely honed system with poor psychology.

Agree.