Why Traders Lose

[comagnum]

Trading goes against human nature - you first have to overcome your own fear and greed, something that few will ever accomplish. Being a winning trader requires a relentless & unconditional persistence.

Common Reasons Why Many Wash Out From Trading.

Under capitalized - a study done by the SEC on futures traders accounts performance: less than $50,000 will significantly impair the ability of a day trader to make a profit. Brokers make you sign a disclaimer acknowledging you have read this in order to open a futures account.

Over-leveraged - taking on position sizes that are way to large in relation to their capital to endure the inevitable string of losers.

Over trading - puts you on the road to ruin. Novice traders are typically oblivious to the effect of trading costs during losing periods.

Exiting winners way to soon and riding losers down way to far. You need some large winners to offset your losers and leave you with a profit.

Lacking a written trading plan - having it in your head doesn't count.

Over Confidence - Novice traders tend to have expectations that are very unrealistic, more like delusional.

 

[maxinger]

Why traders lose ?

Because they follow what the financial experts say.
Financial experts say stop the herd mentality and people really follow what experts say.


We need to follow the herd wisely.
We need to know how to follow the herd early.
eg look at ET forum on China Yuan; the herd was going north. So follow them and be early.

Don't follow the herd years later.

 

[padutrader]

traders lose because their basic premise is wrong-you can still trade with this drawback if your money management makes up for that wrong premise.
trading is demand and supply but 99 % of all traders do not know what is demand and what is supply!!!!!!!!!!!!
i certainly did not that is the reason for my ten years of losses:i could have improved my trading by improving my money management ....but i wanted to know why when i buy, when buyers are more, i lose, and when i sell, when sellers are more, i lose.
some will say markets are illogical but i never believed that because smart money is not illogical....i knew i was not understanding correctly and today i have understood that.

 

[padutrader]

What is so hard about buying retracements and pull backs using support and trend lines?

it is hard because you do not know how far it will go and it will work maybe 60% of the time.
i do not like being wrong 40% of the time and i know many people are like me.

entering on a pullback after a buy or sell climax will only lead to a loss every time:and so it is not a simple matter of entering on pullbacks

 

[volente_00]

They just do

EMG come draw these fools the matrix

 

[deaddog]

Trading looks simple, making money with a few mouse clicks but actually is very difficult.

No it is that simple. A couple mouse clicks gets you into a trade. If you like you can enter with a bracket order so your exits are already in the system. Set it and forget it. It does not get any simpler.

It requires substantial research

Not really; I do very little research, no fundamental research and enter trades based on a few stock scans.

you need to overcome your natural reaction and follow your strategy.

Natural reaction to what? If you follow your strategy you will soon find out if it is a viable strategy. If you don't follow your strategy how will you know if the problem is the strategy or the trader.

If you're not willing to make that personal investment, or can't do that, don't get in.

What personal investment? I hope you are talking about taking the time to study the market, develop a strategy to take advantage of any opportunities you find to profit from what you see, come up with a trading plan and have the disciple to follow the plan.

 

[deaddog]

Trading goes against human nature - you first have to overcome your own fear and greed, something that few will ever accomplish. Being a winning trader requires a relentless & unconditional persistence.

Common Reasons Why Many Wash Out From Trading.

Under capitalized - a study done by the SEC on futures traders accounts performance: less than $50,000 will significantly impair the ability of a day trader to make a profit. Brokers make you sign a disclaimer acknowledging you have read this in order to open a futures account.

Over-leveraged - taking on position sizes that are way to large in relation to their capital to endure the inevitable string of losers.

Over trading - puts you on the road to ruin. Novice traders are typically oblivious to the effect of trading costs during losing periods.

Exiting winners way to soon and riding losers down way to far. You need some large winners to offset your losers and leave you with a profit.

Lacking a written trading plan - having it in your head doesn't count.

Over Confidence - Novice traders tend to have expectations that are very unrealistic, more like delusional.

Pretty well sums it up.

If you don't do any of the above you are well on your way to becoming a successful trader.

 

[ironchef]

Everyone here quoted statistics: 90%, 95%, 99%, 99.9% are numbers been thrown around as the % of losing traders. And yet on ET, the majority of you are winners and trade profitably. Something just does not add up?

I have been trying to find actual numbers from brokerage firms, academic studies and just could not find any verifiable statistics except one study about Taiwan day traders. There I remember the number was like 80%/20%? I attribute the poor showing there to uneducated traders a with gambling mentality (amount of day trading dropped the moment they started a lottery so it seemed the folks there treated trading as casinos).

Perhaps ET statistics could be the real gauge of trading successes?

 

[deaddog]

And yet on ET, the majority of you are winners and trade profitably. Something just does not add up?



Perhaps ET statistics could be the real gauge of trading successes?

Like the Brad Paisley Song "Online" says

I'm so much cooler online

'Cause online I'm out in Hollywood
I'm 6'5 and I look damn good
I drive a Maserati
I'm a black belt in Karate
And I love a good glass of wine

And I trade successfully!!!

 

[maxinger]

Because traders listen to:

trading coach
financial experts
forummers
news from internet

Must develop your own holy grail.
Stop listening. Do your own analysis, develop your own trade plan and trade base on your trade plan.