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

    That's because they just can't get it through their thick skull that losing is actually part of the game. It's a healthy thing to lose once in a while to keep your perspective in check.
     
    #101     Jan 27, 2024
    Jzwu2017 likes this.
  2. schizo

    schizo

    So are you implying that making $200k from $1M is more difficult than, say, making $20K from $100K or $2K from $10K? Maybe you shouldn't be looking at the PnL so damn much.
     
    #102     Jan 27, 2024
    ironchef and murray t turtle like this.
  3. Jzwu2017

    Jzwu2017

    Well, that’s a tall order. Overcoming human emotions in trading is the hardest part itself. I would venture to say it’s the biggest factor why most traders fail, even for those with real edge.
     
    #103     Jan 28, 2024
    ironchef, murray t turtle and schizo like this.
  4. toucan

    toucan

    i agree human emotions in trading is hard to control. i used to get heartburn managing trades until one day, i decided to write an algo that manages trades for me. i have fine tuned it over time and am now left with the heartburn of deciding which setups to trade. LOL

    cheers
    toucan
     
    #104     Jan 28, 2024
  5. Jzwu2017

    Jzwu2017

    Haha you always have heartburns one way or another. Humans will never escape from their emotions. Otherwise, we cease to be humans.

    That’s why I agree algo trading has a huge advantage over discretionary manual trading. But most of us don’t have the ability to program algos. That itself is not easy either.
     
    #105     Jan 28, 2024
  6. alistera

    alistera

    "So are you implying that making $200k from $1M is more difficult than, say, making $20K from $100K or $2K from $10K?"

    Incorrect, you are going in completely the wrong direction, murray turtle gets it, but that's what happens when you come from a more rudimentary background looking up and choose not to listen to people who are willing to share more 'insightful' knowledge, by having HNW lifestyle and capital to match it means making 20% per year is relatively straightforward, as is with almost everyone in trading, having less lifestyle and less capital means their probability of making 20% per year decreases massively.

    So some try with just the capital and wonder why they lose $100,000s, most try with neither lifestyle nor capital and wonder why every time their capital evaporates, that's the 14yr journey that people go through, now if you know UHNW methods you can make the same $ amount in returns per year using 1/5th the capital of HNW, this is a simple fact of finance - if you don't like it you should go back to your day job, if you know sovereign you can do it with 1/10th the capital, you see most people don't understand the pure simplicity of life.

    Most sovereign countries need 200% per year to balance the books, a continent needs 500% per year to balance their books, now many people I've known say I have a luxury problem and like these forums go down the road "let's abuse anyone who might know what they're doing", coming from a HNW background it made everything easier, you're kind of born to generate $150,000-$200,000 as base by your mid 20s, took a long time to understand that's a rare event, and longer to understand even fewer are willing to share that information, like it's some great secret because they took the hard road to get there, it's not.

    The problem is getting to higher levels and beyond in lifestyle, the capital is secondary because you can generate 20% per year with fractional amounts, but for most people that's the whole problem because they are trying to leverage too little capital with too little knowledge which can only work when you have too much knowledge, and that's how you recover massive third party losses or seed new hedge funds in 1yr instead of the normal 3-5yr incubation, you temporary overlay your knowledge base on their dynamics (capital and timelines), unfortunately the simplicity of this is lost on everyone.
     
    Last edited: Jan 28, 2024
    #106     Jan 28, 2024
    murray t turtle likes this.
  7. Motivator

    Motivator

    My forte is identifying patterns. Why ? I have no
    Idea. I see a great set up and 10 other traders dont.. Its weird but thats my strength. I also use stop losses.
     
    #107     Jan 28, 2024
  8. themickey

    themickey

    Woweeee!! Bloody great idea! I might give it a go!
     
    #108     Jan 28, 2024
  9. Well Mickey, I see you are starting the week down under in a frisky mood.:D
     
    #109     Jan 28, 2024
    themickey likes this.
  10. ironchef

    ironchef

    Thank you for your encouragement sir.

    I believe I do have an edge trading options because I have statistics, algo and logic to support it, but I am struggling to quantify my day trading methodology, so I don't have an edge there.
     
    #110     Jan 29, 2024
    murray t turtle likes this.