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Survey: Why 90% trader's failed?

  • #21
  • Oct 8, 2006 8:17pm Oct 8, 2006 8:17pm
Quoting Americantek
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.
Absolutely, I see this all the time. A trader down too much in a trade thinks to themselves that they can't AFFORD to take the loss, not even realizing their loss can get to be 3 to 20X+ bigger by not getting out. Yet on winning trades, especially after suffering some drawdowns, they tend to get out way too soon.

I have also noticed that a trader trading profitably changes their style and approach after one to a few big losses. The avg profit of their trades falls 30 to 70% and they end up taking the same big losses.

ALWAYS PLACE A HARD STOP if you are a new trader and/or lack discipline. It forces you to get OUT of bad trades. Many traders would be profitable if they just set a 10 pip stop.
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  • #22
  • Oct 8, 2006 8:20pm Oct 8, 2006 8:20pm
Quoting Americantek
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.
WOW! powerful stuff!
Relax and be happy.
  • #23
  • Oct 8, 2006 9:34pm Oct 8, 2006 9:34pm
As I am a second-time around newbie, a twobie, if you will, I realize now that my money management the last time I tried this several years ago was atrocious. I now judge my success by percentage gains on my existing balance instead of dollar amounts per trade. That's how accounts grow. I also entirely quit that "per trade" b.s. I have rules now, so all trades are "fire and forget". If I'm losing money I need to look at the way I'm selecting trades, or how I'm setting stops, etc., not individual losing trades.

God, I used to be such a retard!
"The time to act is when others show signs of tire." --W.D. Gann
  • #24
  • Oct 8, 2006 10:03pm Oct 8, 2006 10:03pm
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.

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.
I think you're asking the wrong questions. There are a million and one ways to do something wrong. If you tried to write a compreshensive list of ways to fail you would always find new innovative ways to fail being pioneered by brash young traders.

If I were advising traders who want to become profitable I would tell them instead to focus on different areas. First, they need a method. The best method for traders who are attempting to learn how to trade and to become profitable is a mechanical method. Methods that require discretion are best for traders who are experienced at trading profitably. It is simply asking too much of inexperienced and unprofitable traders to exercise their discretion to turn a profit. It just isn't going to happen. I would also advise to make the system a simple objective mechanical system so that it is actually understandable and therefore possible to implement. It doesn't even have to start out with a positive expectancy though it will need to be developed into a profitable system over time before aspiring traders can start making profits.

After following this simple mechanical fully objective trading system for a while, aspiring traders will start to notice some things that seem like they would help the system become more profitable. Most of those things will not help the system become more profitable but a few of them will. All of them need to be tested (this is where a lot of learning goes on) and the chaff needs to be discarded and the wheat retained. After making some adjustments to the basic system, assuming it is still objective, simple, mechanical and implementable, aspiring traders should start out small trading their systems live. At this point these traders will learn things about money management, psychology and discipline. Rather than focusing on the outcome (profits or losses) these traders should focus on how well they are implementing their strategy, and what can be learned from the mistakes that are being made. A lot of learning will go on at this point if traders take the viewpoint that losses (and profits) are opportunities to learn. These traders may even recognize that their system in its current form is untradeable, and may need to go back to the development phase several times before a tradeable system can be developed. My own experience has been that the best system for me is one that is fully automated as well as the other attributes previously listed such as being simple, mechanical and profitable. Best of luck in your journeys.
  • #25
  • Oct 8, 2006 10:12pm Oct 8, 2006 10:12pm
I voted for others but what I wanted to be able to vote for was all of the above and more.

In final analysis, at least some of the traders who I have seen fail did so due to lack of sufficient funds to mae any system work, no matter how good. If you only have a few hundred dollars, you had better be very good, very lucky and very patient if you want to survive.
  • #26
  • Oct 8, 2006 10:13pm Oct 8, 2006 10:13pm
this is great info. i have just started trading and learning. emotions are a killer on trading. whether it be greed or fear, both are killer factors. ive heard plenty of stories of people who want to stay in trades to see how much money they can make. or the fear of having a losing trade adn asking themselves if they want to do that again. and with that fear they could use greed to say i have to make that money back and then they lose big and give up. thats why im going to try and concentrate on pips only. with 2 trillion dollars a day moving the money will come to me. im just preoccupied with getting pips.
  • #27
  • Oct 9, 2006 3:08pm Oct 9, 2006 3:08pm
Quoting Americantek
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

I hear both of those numbers all the time. What is the source of those stats? I have yet to see it.
  • #28
  • Oct 9, 2006 3:10pm Oct 9, 2006 3:10pm
Well, 67.87% of all statistics are made up... LOL



Quoting Snuffleupagus
I hear both of those numbers all the time. What is the source of those stats? I have yet to see it.
  • #29
  • Oct 9, 2006 3:29pm Oct 9, 2006 3:29pm
My failures in Forex were caused by all of the above in the following order of importance:
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Poor Money Management - 40%
Greed - 30%
Fear / Psychological Damage (emotions) - 20%
Wrong Trading Method / Unskilled - 7%
Lack of Economic Knowledge - 3%

Manchild
  • #30
  • Oct 9, 2006 9:08pm Oct 9, 2006 9:08pm
I belive the #1 reason for traders failing..........


LACK OF PERSISTANCE


There are alot of contributing factors such as money management, greed etc. The successful traders are the ones who keep trying and trying, until they learn enough to make it work.

I dont think there are many traders who make a profit from day 1.
If at first you don't succeed, destroy all evidence that you tried.
  • #31
  • Oct 9, 2006 9:29pm Oct 9, 2006 9:29pm
Everyone knows that its those damn borkers that got the 95%. They then seeded all the forums with this MM and greed crap to hide their tracks
In trading, there is no bullshit. You either make money or you don't.
  • #32
  • Oct 9, 2006 9:37pm Oct 9, 2006 9:37pm
Quoting mrgreen
those damn borkers
That's even funnier than you meant it to be.
  • #33
  • Oct 10, 2006 4:28am Oct 10, 2006 4:28am
I wanted to buy a book "The Disciplined Trader, Mark Douglas" please give comments.
"Invest With The Insiders, Not The Masses" George Muzea
  • #34
  • Apr 26, 2007 10:40pm Apr 26, 2007 10:40pm
a word of wisdom just poped up : we are fail only when we stop trying........
so 90% of the trader is giving up, and only 10% is presistence?
if we fail 9 times and succees in the end, statistically we are belong to 10 % or 90%?

Quoting thuxen
I belive the #1 reason for traders failing..........


LACK OF PERSISTANCE


There are alot of contributing factors such as money management, greed etc. The successful traders are the ones who keep trying and trying, until they learn enough to make it work.

I dont think there are many traders who make a profit from day 1.
  • #35
  • Apr 27, 2007 4:18am Apr 27, 2007 4:18am
This Poll just like a multiple choice question should include "All of the Above"
  • #36
  • Apr 27, 2007 10:12am Apr 27, 2007 10:12am
Because someone is trying to stay at the top?
  • #37
  • Apr 27, 2007 1:19pm Apr 27, 2007 1:19pm
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.
This is exactly the reson I chose other. It take time to learn to trade, most give up way early in the game
  • #38
  • Apr 27, 2007 1:28pm Apr 27, 2007 1:28pm
Quoting Gwan
a word of wisdom just poped up : we are fail only when we stop trying........
so 90% of the trader is giving up, and only 10% is presistence?
if we fail 9 times and succees in the end, statistically we are belong to 10 % or 90%?
I quite agree with you. Those who stay try to learn and understand how to survive.
  • #39
  • Apr 27, 2007 2:04pm Apr 27, 2007 2:04pm
Its so simple !

We must work for the money. Every worker of this wolrd need
3 years to learn his job. If you Study you invest 5-6 years of your life.
If you want to be a pilot you pay 50 000 - 100 000 $ to learn.

Its for every people normal. !!!!


But trader want start in Januar and be a Millionär in Dezember .

For me is this the Key.


Time to understand the Market.


Many pips for all Traders.

All the best from Germany.
  • #40
  • Apr 27, 2007 8:49pm Apr 27, 2007 8:49pm
But at least 50% must lose otherwise the market would not move, right?
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