Why 99% of traders lose money

Hello to all,

lets discuss here why most of people lose some money.

I have the opinion, that the most trades lose money, bcs the have no plan to win.
lets look to all trading book, the most of discussions, everywhere are stated out, that you should not risk mor then x% of your money. That i will agree, you have to do risk managment. But the most important thing is, no one have a winning plan.

Lets say in this way, a lot of people say, let the winners run. this is maybe a point, but not a plan. Nearly nobody want to start a business without a business plan. I know, there are some projects on kistarter or some internet startup in the past where this was working. But in general, 99% of trders have a job. Most of them are not self employed. Most of them following a business plan from the managment.

In trading, you are your own manager. You have to make your own plan. A businees plan is always a plan. Noone of them will be fullfilled in time, relly nowone. This is like the 5 year plan from Russia in past communist years. No plan was fullfilled. But this isnt the question in my opinion. The mean thing is, you have to have plan. A plan should have goals. This goals must be hard to arrive, but not be impossibe.

Let me stay out, the most of the hedge funds make 10 till 100% a year. The funds with 100% you can count on one hand.

What is a goal? Is a goal to find daily profit? when yes, how much daily profit?
What comes after daily profit? whats happen if you pass the daily profit?

I think, a plan have to include more then one goal like

1. daily profit
2. weekly profit
3. monthly profit
4. yearly proft
5. 2 years profit
6. 3 years profit
7. 5 years profit

and this goals have to be monitored regulary on daily, weekly, monthly, yearly base.

Why i think you should have to do this?
looks to the daily profit, yes you can pass it, also 4 days a week, but you can reach your weekly target.
you can pass your weekly target 3 weeks a month and you can reach the montly target,
even you can continue this.

but in general, you should arrive your target. f you cant arrive it continiusly, you maybe have to adopt it.
if you pass a target, looks to the next higher one and look if you can reach it. if the next higher one is impossible, adopt your targets.

feel free to discuss

amando

more than that lose money, according to brokers.

I am an employee but I know how to run a small business.
I would say that trading is the easiest business out there, because all we have to manage is an ACCOUNT lol.

all this is in theory, because >99% of people make huge deposits during the learning process.

99% of traders lose money through commissions and spreads. 1% of traders don't pay commission or inflated spreads.
Someone might lose 200 dollars to their broker in a month, but they'll make 1800 dollars P/L on their account.

People lose money for many reasons - because they're inexperienced, because they're ignorant, because they are reckless, sometimes they lose money because their brokers are untrustworthy, etc.

Because losing money is sooo damn easy and mostly because we don’t want to loose we keep our loosers run. This is what I have seen so many times and is always the main reason for account blowing after overleveraged trading.

Or even worse: Adding to losers, instead of adding to winners.

The mentality of a unexperienced / new trader is:

1. Has no problem letting losers run. Because "the market will come back eventually".
2. But closes a position as soon as it is a little bit in profit, because "the market will turn against me immediately".

So letting losers run and cutting profits short is one major reason why so many traders lose money, instead of cutting losers short and letting winners run.

MW108, this is a good point, let the loosers run, but why?
i use a Stop Loss to protect this. SL is the most important thing. Even i think, its not a good possibillity to make the looses cheaper and add a new position. Why i should do this. A looser is an entry in wrong direction, can be happen. But its like a women, i dont stay in a bad relationship and looking for other opportunities. If its bad, i have to go out

all the people who say, the lose money about their broker? yes i heart this very often, but in general, its really a broker fault? if you think your broker is the problem, why you dont change it? there are good brokers out there

amando

That's all folks. End of story.

Dailyfx and FXCM had a joint exercise to find out what makes traders lose money.
The #1 reason is holding on to losses more than winners. And taking profits earlier.
I believe to find a predictable trending market. Gauge your risk to reward and plan your stops.

That make sense. Most people fear losing money, and don't think floating loss is real loss.

reciprocally not to hold winning trades too long.

Agreed, The key is, not to hold your trade because of losing, it should base on your probability of winning of your strategy.
The same to holding winning trade: not to hold your trade because of winning, it should base on your probability of winning of your strategy.
The market won't care whether you win or loss.

Presently, while some of this needs to do with the brokers tricks and misdirecting training that they put out there for their own particular benefit, it additionally needs to do with the traders also. Most traders lose, on the grounds that they don't regard forex trading as a venture. Without a doubt, the forex advertise moves regularly and it is open 24 hours per day, 5 days seven days. Be that as it may, this doesn't legitimize NOT regarding forex trading as a speculation.

Only pro traders can do so (hold their running trades for a big TP)! It requires good trading skill, low skilled traders lose their momentum too early when their trading positions are negative!

Losing money is a regular part of Forex trading . there is none who can avoid loss completely from here in spite of good trading knowledge . but by taking some major steps loss can be reduced of course. Behind the losses the main reason is emotions that cannot avoid the traders especially the new Forex traders.

The newcomers cannot avoid losses by their greediness and emotions, it’s true. But the regular traders cannot come out their losses because of having most powerful risk management and MM. they always fours on just acquiring good trading knowledge . of course we have to do it. But besides it must be focused on risk managing approach if we want to avoid losses.

That's one of the main reasons, yes, but I think some people lose money despite actually being experienced. It happens. Their ego comes into play.

Good evening,
That´s a question that would never stop being asked, the answer is as simple as trading. People lose money because they don´t understand what they are supposed to do. Period.

It's not about PRO ...it's all about patience . In spite of having all robust technical market can move against you. If you are impatient , trading with huge leverage , frequently open and close trade , difficult to survive in a long run.

Yet another thread on why traders lose. Here is a yet another list of reasons.