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Survey: Why 90% trader's failed?

  • Poll

  • Why Most Trader's Failed?
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  • #1
  • First Post: Oct 8, 2006 9:32am Oct 8, 2006 9:32am
Helo FF members,

I'm doing a survey why most traders lose in trading. Here and there mentioned that 90% of the traders failed. Are they failed because of thier trading method? unskilled? or money management? lack of information? and etc.

The successful traders says "Trade with the trend," "Cut your losses and let your profit run", "Money management" etc. But why we still failed?

I appreciate if you can please tell me the reasons so we newbie can learn for the professional the right way/attitude to trade the forex.

Thank you.

QS.
"Invest With The Insiders, Not The Masses" George Muzea
  • #2
  • Oct 8, 2006 9:52am Oct 8, 2006 9:52am
very poor money management
  • #3
  • Oct 8, 2006 11:19am Oct 8, 2006 11:19am
I chose "Others" in the poll because I believe that money management is just 1 component & not the whole universe of trading...

I summarize my opinion of why most traders fail in just 1 sentence, "They can't keep what they have"...

This statement can be seen as a money management problem, but it actually isn't...Keeping what you have is not solely money management...Keeping a winning trade is not related to money management...Keeping away from low probablility trades (And thus keeping your capital without high probability risks) is not related to money management as well...

I heard about many traders who give money management a very low portion of their trading effort, yet they still succeed in the long run....


Thanks,

Nader
  • #4
  • Oct 8, 2006 11:28am Oct 8, 2006 11:28am
Because there are checkboxes, I checked them all. My "other" is poor technical skills.
  • #5
  • Oct 8, 2006 11:51am Oct 8, 2006 11:51am
I don't think most trader have the right mindset.


turbo
  • #6
  • Oct 8, 2006 12:47pm Oct 8, 2006 12:47pm
Never see the big picture. Look at mthly, weekly, daily chart direction for big picture and then use smaller time frame for entry/exit based on the trend direction only.
The future depends on what we do in the present.
  • #7
  • Oct 8, 2006 12:55pm Oct 8, 2006 12:55pm
I don't think most traders fail because of one reason in particular. It's really a combination of all of these reasons.

In order to trade successfully one cannot be stubborn and has to be focused!

I'm just speaking from experience of course ;-)

Kal
  • #8
  • Oct 8, 2006 12:59pm Oct 8, 2006 12:59pm
i dont see the answer i would choose. the reason, i think, is because they stop trying. everyone expects trading to be easy, they think they are "special" and this will be a one year cake walk. and when they find out its harder then they thought, they quit. failure is the point that you stop trying.
Relax and be happy.
  • #9
  • Oct 8, 2006 1:11pm Oct 8, 2006 1:11pm
Quoting merlin
i dont see the answer i would choose. the reason, i think, is because they stop trying. everyone expects trading to be easy, they think they are "special" and this will be a one year cake walk. and when they find out its harder then they thought, they quit. failure is the point that you stop trying.
*When I first came accross trading forex, I thought OMG people are getting loaded rich QUICK! I can't believe this is legal, I can't believe everyone is not trading. Everyone can become a millionaire I thought. Then I started my search for that 'edge' that one way to tell me exactly where the chart would go next. After reading more and more, I became somewhat frightened because I realized, OMG what have I gotten myself into. I like this. And it's so huge, I almost unknowingly dedicated myself to learning this giant sum of information. Trading is huge. It's dedication. It is real. Let the learning begin, I decided. *That was only a few months ago.
  • #10
  • Oct 8, 2006 1:15pm Oct 8, 2006 1:15pm
Quoting narafa
I chose "Others" in the poll because I believe that money management is just 1 component & not the whole universe of trading...

I summarize my opinion of why most traders fail in just 1 sentence, "They can't keep what they have"...

This statement can be seen as a money management problem, but it actually isn't...Keeping what you have is not solely money management...Keeping a winning trade is not related to money management...Keeping away from low probablility trades (And thus keeping your capital without high probability risks) is not related to money management as well...

I heard about many traders who give money management a very low portion of their trading effort, yet they still succeed in the long run....


Thanks,

Nader
I second that Nader. Thats my veiw also. Also I might like to add jumping from one system to another instead of sticking with one...Just my 2 pips worth....Valerie....
  • #11
  • Oct 8, 2006 1:37pm Oct 8, 2006 1:37pm
i dont agree merlin said traders did not try... in fact traders tried

Its the game Interbanks manipulation...

Until there are better transparencies in FX

Stay out my friend...
  • #12
  • Oct 8, 2006 1:42pm Oct 8, 2006 1:42pm
I think so many traders start with their $1k. That is not enough to do anything with in most peoples view. So instead of going to a broker and trading .25c/pip... they blow the whole thousand on 2 or 3 highly leveraged trades. They might refund their accounts... but they did not give the time they needed to find a good strategy before they lost their money in the first place.

I got messed up in the last sentence or two of that post. Though the truth is... people have to be conservative, find a strategy that works, then go in lightly. If you only have $1k or less... go open an account over at Oanda and trade really light. Use this time to find strategies that would work well. Then get your hands on 10k... then make money.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #13
  • Oct 8, 2006 1:47pm Oct 8, 2006 1:47pm
Quoting dontjump
i dont agree merlin said traders did not try... in fact traders tried

Its the game Interbanks manipulation...

Until there are better transparencies in FX

Stay out my friend...
Merlin said that they "stop" trying. That is different than they didnt try. What Merlin said is true... I know this because it happened to me with the stock market. I got sucked into several "pump and dumps" and lost 10% of all of my money. When I reviewed what was occuring I realized I had no chance at all of making money trading that way. Thus I have moved to forex.. been here for 6 months now and love every minute of it.
The market is my nation. Traders, my family. Hello, brothers and sisters!
  • #14
  • Oct 8, 2006 4:02pm Oct 8, 2006 4:02pm
Quoting StockKJay
I think so many traders start with their $1k. That is not enough to do anything with in most peoples view. So instead of going to a broker and trading .25c/pip... they blow the whole thousand on 2 or 3 highly leveraged trades. They might refund their accounts... but they did not give the time they needed to find a good strategy before they lost their money in the first place.

I got messed up in the last sentence or two of that post. Though the truth is... people have to be conservative, find a strategy that works, then go in lightly. If you only have $1k or less... go open an account over at Oanda and trade really light. Use this time to find strategies that would work well. Then get your hands on 10k... then make money.
I agree with you. Many people open account with $300 and trade $2-3/pips.
  • #15
  • Oct 8, 2006 4:27pm Oct 8, 2006 4:27pm
You should have an all of the above box.
There is so much information to learn to truly trade successfully. If you do not have a REAL successful trader to show you the ropes, the learning curve is large and it is a long road.

Forums like this are a huge help compared to when I learned but you still have to sort out the wisdom from the crap. It just takes time. So, I would say that the overall reason people fail is that they just don't have enough training and or have given themselves enough time to truly learn.
Profit is where readiness meets Opportunity
  • #16
  • Oct 8, 2006 5:04pm Oct 8, 2006 5:04pm
I love it how so many people quote the 90% (or 95%) of people fail in forex statistic as if it were actually true. It very well could be true, but I think it is a bit of a fallacy to just perpetuate that figure based on having heard it from others. Personally, I don't care how many people or what % are successful - it doesn't effect me.

Having said that, and having traded very successfully for quite some time, I find it a bit hard to believe that any more than 10% of people who trade actually are successful in the long term, so perhaps the figure is correct.

I will say that many do fail. I have seen people, people I know, fail and fail hard, losing a lot of money. But failure is only how you interpret reality, and trading is all about being able to handle any situation. Trade on
  • #17
  • Oct 8, 2006 5:58pm Oct 8, 2006 5:58pm
Everyone starts off on this journey with high expectations. Then we get the rug pulled out from under us & some give up then. Are these the ones who needed money management skills? I see so many going for the killer trade.

Pips are Pips and that is all they are. Once we have the skill to consistently get them on a one lot basis, then we may think of trading multiple lots. I see so many stories of painful losses. e.g. some traders have large stops, say hundreds of pips, and they see the trade going against them. We could get out of the trade, keep your money, and then get back in -- nothing wrong with that. It seems this story inparticular plays out with consistency. So, my thought is that we are stubborn to change our ways. But if the same results are happening, maybe that is the clue we need to do things differently.

As for the survey, all of the above would be good but big one missing is Emotions.

Just my 2 pips

Ronny C.
  • #18
  • Oct 8, 2006 6:06pm Oct 8, 2006 6:06pm
Very simple.
Most people are effectively guessing when they trade.
You have to be able to correlate a statistical significant amount of certain events with certain price movement, otherwise you are simply guessing.
This is hard enough to do in technical trading, and even harder to do in fundamental trading.
For this reason, I would estimate the percentage of people that (more or less) even out are 70-80%. 10-15% earn big, and 10-15% lose big. Which would be a normal probability distribution.
  • #19
  • Oct 8, 2006 6:38pm Oct 8, 2006 6:38pm
Quoting Qu|cksilver
Helo FF members,

I'm doing a survey why most traders lose in trading. Here and there mentioned that 90% of the traders failed. Are they failed because of thier trading method? unskilled? or money management? lack of information? and etc.
I have actually analyzed the trades of hundreds of traders. Money management is the #1 reason for failure. Traders will take TINY profits and HUGE losses. And of course many are not very good and have low win rates. Let me show you two examples of traders. The first is clearly a big time losing trader. LOW Win % and also Avg Losing Trades close to 3X more than Winners!

http://www.topgunsoftware.com/elitetrader/statl.gif


The next example is a successful trader with about equal avg win and loss but 70% winning trades.

http://www.topgunsoftware.com/elitetrader/stath.gif
{Promotion Removed}
  • #20
  • Oct 8, 2006 6:50pm Oct 8, 2006 6:50pm
Another way of putting the same idea about taking small profits and large losses is this analogy, follow along with me for a moment and and answer truthfully for yourself. If I presented you with a choice A) you can have $50,000 guaranteed or b) you can have a 50% chance of getting $100,000 and a 50% chance of getting $0 - Which would you pick? Be honest. Most everyone would pick option A right?


Now if the tables were turned and you had the option of A) LOSING $50,000 guaranteed or B) 50% chance of losing $100,000 and a 50% chance of losing $0 - which would you pick? Most people in this case would chose option B since there is at least a chance of not losing anything.

This example shows how human nature leads to traders taking too much risk on their downside and being too conservative when in the black. Think about this - its an extremely important lesson.
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