What's the Biggest Reason Why Traders Fail?

Discussion in 'Trading' started by schizo, Jan 21, 2024.

Why do so many traders fail?

Poll closed Feb 20, 2024.
  1. Being undercapitalized

    13 vote(s)
    26.5%
  2. Not having a trading plan

    15 vote(s)
    30.6%
  3. Lack of discipline (eg. too emotional and not following a trading plan)

    20 vote(s)
    40.8%
  4. Lack of knowledge or experience (eg. either too dumb or too arrogant)

    15 vote(s)
    30.6%
  5. Lack of focus (eg. jack of all trades, master of none)

    11 vote(s)
    22.4%
  6. Poor money- and risk-management (eg. taking on too much risk)

    26 vote(s)
    53.1%
  7. Impatience (eg. always getting in and out too soon)

    13 vote(s)
    26.5%
  8. Overconfidence (eg. IT'S DIFFERENT THIS TIME!!!)

    16 vote(s)
    32.7%
  9. Being emotionally tied to the stocks

    8 vote(s)
    16.3%
  10. Being emotionally tied to the market direction (eg. alway bullish)

    8 vote(s)
    16.3%
Multiple votes are allowed.
  1. schizo

    schizo

    Not surprisingly, we all know why and yet we keep committing the same sin over and over.
     
  2. maxinger

    maxinger

    Because they follow the book.
     
    Leob likes this.
  3. Honestly, this isn't mentioned or talked about often, but a lot of people go into this thinking they can do it, but deep down on a subconscious level they truly believe they can't. This has to be undone in order for you to succeed at all.
     
    Dual 1219 and murray t turtle like this.
  4. SunTrader

    SunTrader

    Bored, huh?
     
    murray t turtle and ondafringe like this.
  5. None of the above choices. It's inherent in free exchange markets.

    Chakraborti, 2005, "Yard Sale Model." And research along the same lines since.

    Even in the absence of transaction costs, adequate capitalization, or quantifiable edges, most traders will lose. It's baked in.

    Also see research on Wealth Condensation in the 90's from Bouchaud and other econophysicists. Also from Ole Peters (bit of a crank, but got this particular thing right).
     
    traderob and newwurldmn like this.
  6. If you have low cap and no other income streams, it is much harder to trade then if you have income coming in.

    Work to make yourself a better trader so that you can one day become a full time trader.

    I traded better lately as I currently have more income coming in.
     
    oda, murray t turtle and smallfil like this.
  7. ondafringe

    ondafringe

    Must be. :)
     
  8. Businessman

    Businessman

    Undercapitalised, if i had $10 or $20 million, i could average 10% a year, with no drawdown ever greater than 10%, and less than 5% drawdowns most years.
     
    murray t turtle likes this.
  9. schizo

    schizo

    LOL, must be. Actually, some of the threads I read over this weekend made me feel all depressed. I wonder why they just can't give up, even after so many years of losses.
     
  10. PPC

    PPC

    It reminds of Nassim Taleb’s observations:

    "The 5 traits of the market fool
    1. Overestimating accuracy of his beliefs (black swan)
    2. Getting married to his positions
    3. Changing story
    4. No plan for taking losses
    5. Is in denial (attributes losses to bad luck, and wins to skill)"

    PS: I believe that most of the trading obstacles can be overcomed by commitment and taking full responsibility for one’s own results.
     
    #10     Jan 21, 2024