Traders don't "burn out"....they fail. I just wrote a book on this subject. In my opinion, the main reason traders fail is that there are no barriers to entry to be a trader. Anyone can be a trader as long as they can fund an account. This leads to extremely unprepared "traders" attempting to make money chasing stocks around. They don't treat it like a business, and have no strategy before attempting to trade. If you go to failedtraders.com the first chapter of "Failed Traders: The 20 Common Mistakes Committed By Over 1000 Losing Trader"is posted along with the 20 mistakes.
Can only speak about my self. No idea of working setups, miserable risk - management. My account got hammered one time. That was pain. About 8 Years ago. Today, I'm humble and follow strict my rules. One of them is to honor my stops. I'm very patient to wait /find reliable setups. No more stress. When a trade goes wrong, take the loss. Otherwise your loss will often get bigger AND you miss in the meanwhile other decent opportunities.
I had similar experience. There are multiple ways to look at this. Stocks with great fundamentals after a spike down will retrace, advantage dollar cost average. However, momentum stocks with questionable fundamentals will spike down and potentially stay down. I owned GE, it went down > 10%, I average down a couple of times. Then it it retrace to original purchase price. End up with over 6k profit in 3 months. Similar experience with CSCO, BAC, WFC, BMY, etc...
It's only 90% that fail?? - I think out have a typo more like99% -LOL ----- why? --- because they are not building a website/forum to sell the dream selling courses - even if they can't trade writing books on trading selling seminars on trading selling up black boxes for automated trading --in short because they are trading - not selling trading ---
Recent polls here in ET says ET traders are 90% profitable. Not sure where you are getting your 99% loser numbers. 89% difference in the numbers...hmmmm.
Well its the hardest game in the world for a reason. The need to trade, FOMO, fear, greed, our own selves being our worst enemy. Honestly writing some of these things....I realized what the fuck I am doing wrong. I am still not perfect, still not consistent. Trying to get to the destination of ONE PIECE.
Analogy : Why 90% of the beginner (traders) drown in swimming pool (market) ? Because they think they can apply their bicycling skill (eg. analytical) to move in water (trade). Bicycling and swimming are two unique skills. Each skill has to be acquired separately putting sufficient effort. Buying a flute (opening a trading account) is very easy. Making noise out of it (eg. analytical trading) is also very easy. Making pleasant and rhythmic sound out of flute needs mind, body and soul to connect properly, which may either need natural talent or years of practice. Trading is an art called business. It is primarily a philosophical skill powered by skills like psychology, creativity and last but not least analytical skill. A trader may either have natural trading skills or develop them systematically by putting time and effort. Why philosophy important in any business, including trading business ? https://www.quicksprout.com/2013/06/20/11-business-philosophies-to-live-and-die-by/ http://smallbusiness.chron.com/importance-business-philosophy-37798.html http://www.inc.com/guides/create-a-company-philosophy.html Creativity the true master When we say trading is an art, creativity has to be the master and analytical skill has to be it's servant. Bloom's Taxonomy explains it.
Three dimensions of trading psychology "Mass psychology", the psychological factor behind demand and supply. "Trading philosophy / psychology", how a trader perceives and pursues trading business. "Trader's psychology", how a trader balances his emotions between fear and greed. Feel free to follow my thread : https://www.elitetrader.com/et/threads/day-trading-basics.305348