...The vast majority of retail traders lose money for one or more of the 3 reasons cited below, and they are nothing to do with big bank/institutional money conspiracies against the retail trader! They are:
1. They don't know what a trading edge is, what you need to know about one to maximise your money and risk management to it, and generally they don't have one anyway. Ie - they don't have the recorded empirical evidence of an edge they feel theoretically has potential, over a large forward tested representative sample in the market conditions it is suited to and that they should therefore only trade it in. Only this will prove that such an edge may exist or not. A lot have a second hand edge (bought from a dodgy vendor with promises of instant wealth or picked up from a forum or something,) -or- some flimsy anecdotal/observational evidence but over a small unrepresentative sample, about an edge they think they have found and may exist.
2. They are generally underfunded re margin relative to the unrealistic profit targets they need to make trading a worthwhile activity, at the opportunity cost of something else with their time/money. They are therefore generally over-leveraged for the 'edge' they are trading assuming they have one, and this is related to point 1. above re not knowing the critical stats about the edge's performance in order to optimise money and risk management to it.
3. They never develop the necessary psychology to trade the edge they are using, profitably. This leads to mistakes and ill discipline that ultimately results in losses.
1. They don't know what a trading edge is, what you need to know about one to maximise your money and risk management to it, and generally they don't have one anyway. Ie - they don't have the recorded empirical evidence of an edge they feel theoretically has potential, over a large forward tested representative sample in the market conditions it is suited to and that they should therefore only trade it in. Only this will prove that such an edge may exist or not. A lot have a second hand edge (bought from a dodgy vendor with promises of instant wealth or picked up from a forum or something,) -or- some flimsy anecdotal/observational evidence but over a small unrepresentative sample, about an edge they think they have found and may exist.
2. They are generally underfunded re margin relative to the unrealistic profit targets they need to make trading a worthwhile activity, at the opportunity cost of something else with their time/money. They are therefore generally over-leveraged for the 'edge' they are trading assuming they have one, and this is related to point 1. above re not knowing the critical stats about the edge's performance in order to optimise money and risk management to it.
3. They never develop the necessary psychology to trade the edge they are using, profitably. This leads to mistakes and ill discipline that ultimately results in losses.
Intraday swing scalper (+) via 1min+ repeating set-ups
