(Why) do most traders lose?

Discussion in 'Psychology' started by kiwi_trader, Jul 25, 2006.

Why do traders lose?

  1. Undercapitalized

    23 vote(s)
  2. Trading Strategy: Entry

    20 vote(s)
  3. Trading Strategy: Exit

    26 vote(s)
  4. Psychology/Discipline

    137 vote(s)
  5. Money Management

    65 vote(s)
  1. Over use of CAPS LOCK key is one reason many traders are ignored... :D
    #51     Jul 26, 2006
  2. eagle



    Please post often, in this way you can improve the writing structure that make us easy to read and understand or ask Thunderdog, he is good for that. :D

    Then your good point will be worth.
    #52     Jul 26, 2006
  3. fttrader


    You daytrade and swing trade.
    Just like I did.
    You paper traded for months and became profitable.
    Just like I did.
    You started small then scaled up 10-fold.
    Just like I did, except scaled up 5 fold.
    You followed your rules.
    Just like I did.

    Tell me you've been consistently profitable for at least 2 years.
    Not like I did.
    tell me you are attempting to maintain your living expenses from trading alone.
    like I did and failed.

    The point is that you will win battles, but will you win the war?
    for want of a better analogy. Don't want to put a damper on your successes, just to warn against the danger of complacency.

    WINBIG007 mentioned psychology (or was it PSYCHOLOGY :) . No doubt. I suspect proper environment is equally, if not more important.

    The environment of good support by relations and friends. Of good financial wellbeing and a contingency fund to fall back on.
    Of successful mentor(s) or peers you can call upon to help when things are not going according to plan (ET is a help in this regard).
    Of a life outside of trading that you can enjoy.
    Of overall wellbeing and harmony

    Then you will be in the right mindset to trade consistently profitably for a long time. How many of us have that environment. Maybe that's how so many fail. It's the lack of a proper trading environment from which, no doubt, the right psychological mindset can spring forth, so long as we recognize that trading is a business of losses (to borrow someone's phrase).
    #53     Jul 26, 2006
  4. Very interesting question. I believe the reason most traders fail is their mis- conceived notions of their own market knowledge and their lack of discipline. Let's face it trading is the only investment position that isn't actually a sales job, yes even portfolio management is now more about asset accumulation and sales than actual performance. People with sales backgrounds tend to believe they are much more the expert than reality will prove accurate. In other words you can't bullshit or backslap your way to profitable trading. For many people this is the first, only and last actual performance based position they will ever hold.
    #54     Jul 26, 2006
  5. Cheese


    Well that is the nub. The environment or whatever you are prepared to blame for failing as a trader.

    No, a person who fails, fails because among other things he can't or won't take responsibility for himself if he is prepared to blame someone else or something else. This theme is as common as humanity.

    You want to win. Its down to you solely.
    You want to succeed. Its down to you solely.
    You want to make a fortune. Its down to you solely.
    #55     Jul 26, 2006
  6. fttrader


    Blame! No. Is that the subconscious revealling itself!!

    If you were to take out the word 'solely' then that's truth regurgitated. For I can tell you, while it's down to hard work and personal sacrifice, real success is never done solely. A myriad of other things must fall into place. Do not underestimate the importance of help from others in your path to the riches, whether that be trading or other goals in life. For a man who can say he achieved everything by himself, has only himself to thank.

    Trading is tough, as you know. Anything that can help to ease the path will be beneficial. That goes without saying, but I know for myself, and I suspect for many, a proper support system in place, call it what you will (a conducive environment as I touched on), is vital, especially for the beginning trader. When I didn't have the right environment my trading was erratic, when I did, I made money more consistently. Consistency is key. Trying to keep that up for a long period of time I believe few will ever be prepared for it.
    #56     Jul 27, 2006
  7. Cheese


    Sorry I never use blame. Consistency becomes routine for an accurate methodology reinforced by repeated experience

    Whatever makes up success it is still solely down to the author of that success. Of course if he elicits help and utilizes whatever resources available to him, these are just components which he marshals for his purpose.

    However if it comes to commenting on your own success to others that is a different matter. I attribute credit or partial credit to others because a balanced individual does not need praise for his own success. He already gets plenty of benefit from his own success.
    #57     Jul 27, 2006
  8. 1) they have got not a f&*%king clue what the market is all about
    2) focus on the money and not on consistency
    3) trade too large before they understand the importance of 1 & 2

    by the way - I think 99% of all backtesting is useless

    peace to you

    vital statistix
    #58     Jul 27, 2006
  9. nitro


    #59     Jul 27, 2006
  10. taowave


    Care to elaborate why you feel 99% of all backtesting is useless??

    Not agreeing/disagreeing,but would like to hear your thoughts
    #60     Jul 27, 2006