Why do we still lose? | Forex Factory

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Why do we still lose?

  • #1
  • First Post: Mar 29, 2019 5:23pm Mar 29, 2019 5:23pm
Sometimes I wonder why we still lose when so many information is readily available and so many strategies and skills abound everyday.
Why do we still fail?
  • #2
  • Mar 29, 2019 9:01pm Mar 29, 2019 9:01pm
that is because it's not a technical element that we are missing, but something within us as traders. However, one big reason why traders fail is because we let our losers run, and cutting our winners short. Within that last sentence, there is a whole bunch of emotions that you as a trader choose to act on. The notion that we want to be right all the time, really is not a productive skill dealing with uncertainty.
The list of cognitive biases that work against us is long - https://capital.com/top-50-cognitive-biases-list
and I think either you need to change your thinking or biases, which is extremely difficult, or you get to know your weaknesses (I have trouble holding my winners longer) build a process and black and white rules around your short comings is a way to structure you from making too many mistakes.

I think to a point that I'm not really thinking about what I do good and well, but how can I minimize my mistakes.

I hope this helps
  • #3
  • Mar 30, 2019 3:01am Mar 30, 2019 3:01am
Quoting Bryn23
Sometimes I wonder why we still lose when so many information is readily available and so many strategies and skills abound everyday. Why do we still fail?
Well; if your success ratio is above 60% then its not a problem; here we cant expect 100% success; because Forex is all about probabilities; not certainty.
  • #4
  • Mar 30, 2019 10:32am Mar 30, 2019 10:32am
Just because there is a lot of information does not mean that all this information is useful, nor does it mean that the people with access to it have the discipline to implement what they've learned correctly.
  • #5
  • Mar 30, 2019 10:41am Mar 30, 2019 10:41am
Quoting mlawson71
Just because there is a lot of information does not mean that all this information is useful, nor does it mean that the people with access to it have the discipline to implement what they've learned correctly.
Well said & I see so many misleading news site of Forex trading; so its not easy journey for the new traders.
  • #6
  • Apr 1, 2019 11:15am Apr 1, 2019 11:15am
having information and making good use of information are two different things, also for me emotions are my biggest problem, as someone said above i find myself trying to ride out the losses hoping they will turn but when i make a successful trade i cut it short as soon as i see the profit in fear of loosing it. i know i need to work on having faith in what i have learnt.
  • #7
  • Apr 1, 2019 11:50am Apr 1, 2019 11:50am
Quoting walpants
having information and making good use of information are two different things, also for me emotions are my biggest problem, as someone said above i find myself trying to ride out the losses hoping they will turn but when i make a successful trade i cut it short as soon as i see the profit in fear of loosing it. i know i need to work on having faith in what i have learnt.
Hi Walpants, it's only natural having these emotions, but you have the choice of acting on them. writing your emotions down and perhaps manage your winning trades more systematic could be your solution. I also suffered from taking profits too early. Once you get this right, you are more than half way from becoming a profitable trader.
  • #8
  • Apr 1, 2019 12:22pm Apr 1, 2019 12:22pm
Quoting Grabowski
{quote} Hi Walpants, it's only natural having these emotions, but you have the choice of acting on them. writing your emotions down and perhaps manage your winning trades more systematic could be your solution. I also suffered from taking profits too early. Once you get this right, you are more than half way from becoming a profitable trader.
thank you, sounds like good advice, the daft thing is i know what i need to do its just doing it thats the issue, not easy to control your own mindset.
  • #9
  • Apr 1, 2019 1:41pm Apr 1, 2019 1:41pm
Quoting walpants
{quote} thank you, sounds like good advice, the daft thing is i know what i need to do its just doing it thats the issue, not easy to control your own mindset.
It's probably the hardest thing to do in trading. The old saying "plan the trade, trade the plan" is kind of bs because it's not possible. Even when you think you do, you most likely have a few rules changed here and there a long the way.
I would recommend instead of telling yourself that your feelings are wrong and trying and get rid of them, rather acknowledge them as they are, perhaps even write them down.

It's funny how decision making is structured. We were told that decision should be rational and logic, where in reality ( and neuroscientist has known this for a long time) you cannot make a decision without emotions. Which means that when you exit a trade, no matter how systematic your strategy is, there will always be emotions involved in the process.

I would go so far saying that what makes you feel really uncomfortable in trading, is probably the edge you need in the markets. But that's my opinion, not everyone agrees :-)
  • #10
  • Apr 1, 2019 3:06pm Apr 1, 2019 3:06pm
From My experience after 12 years in FX...its a starting capital and the gap between reality and expectations.
Help to be helped.
  • #11
  • Apr 2, 2019 10:43am Apr 2, 2019 10:43am
Quoting Lazar83
From My experience after 12 years in FX...its a starting capital and the gap between reality and expectations.
I agree. One should have realistic expectations or they'd lose even more money.
  • #12
  • Apr 3, 2019 5:40am Apr 3, 2019 5:40am
I am very new to forex trading (only half a year!) but reading the posts here and elsewhere online, it seems that forex trading can be profitable over time. I have a broker and so far I have made an overall profit. Albeit, the profits are 2%/month but a profit is a profit. I'm also playing the long game here so we'll see what my accounts look like in 10 years.
  • #13
  • Apr 3, 2019 5:56am Apr 3, 2019 5:56am
It's simple. Retail traders lack the information that institutional traders have. It's that simple. I'm still a junior member here although I've been on Forex Factory well over a year and just have never really contributed to the community. But as soon as I have full membership rights I'm going to post a forum regarding my trading experience which is 1+ year worth and explain why retail traders simply lack the edge. Other traders here are gonna say 1+ years is not enough trading time, but it's not them who decides if I have experience enough, it's me. And I've tried a lot of strategies, used tons of indicators and used lots of EAs to tell me one thing, retail traders lack the edge.
  • #14
  • Apr 4, 2019 5:51am Apr 4, 2019 5:51am
Quoting guttsman007
It's simple. Retail traders lack the information that institutional traders have. It's that simple. I'm still a junior member here although I've been on Forex Factory well over a year and just have never really contributed to the community. But as soon as I have full membership rights I'm going to post a forum regarding my trading experience which is 1+ year worth and explain why retail traders simply lack the edge. Other traders here are gonna say 1+ years is not enough trading time, but it's not them who decides if I have experience enough, it's...
we have been waiting for you since the dawn of time, it is like the dark clouds have parted and god is lowering you down on his love swing, shiney and bright, you are the savour to our anxiety,
life is a reflection of what we allow ourselves to see
  • #15
  • Apr 4, 2019 8:19am Apr 4, 2019 8:19am
Quoting guttsman007
It's simple. Retail traders lack the information that institutional traders have. It's that simple. I'm still a junior member here although I've been on Forex Factory well over a year and just have never really contributed to the community. But as soon as I have full membership rights I'm going to post a forum regarding my trading experience which is 1+ year worth and explain why retail traders simply lack the edge. Other traders here are gonna say 1+ years is not enough trading time, but it's not them who decides if I have experience enough, it's...
You can have a much edge as you like. If you lack the risk management part you will eventually blow up your account.
  • #16
  • Apr 4, 2019 11:42am Apr 4, 2019 11:42am
Quoting Grabowski
{quote} You can have a much edge as you like. If you lack the risk management part you will eventually blow up your account.
That and discipline in general. It doesn't matter how good your strategy is if you lack the discipline to use it properly.
  • #17
  • Apr 4, 2019 12:34pm Apr 4, 2019 12:34pm
Quoting guttsman007
It's simple. Retail traders lack the information that institutional traders have. It's that simple. I'm still a junior member here although I've been on Forex Factory well over a year and just have never really contributed to the community. But as soon as I have full membership rights I'm going to post a forum regarding my trading experience which is 1+ year worth and explain why retail traders simply lack the edge. Other traders here are gonna say 1+ years is not enough trading time, but it's not them who decides if I have experience enough, it's...
If only everything was so simple in trading
  • #18
  • Apr 4, 2019 9:29pm Apr 4, 2019 9:29pm
I think if I had to narrow it down to one key component, it would probably be taking responsibility for your trading and money management in general.
  • #19
  • Apr 4, 2019 10:10pm Apr 4, 2019 10:10pm
particular reason we have when making a loss , generally most of the reasons are same and it is emotions , because of this nature by and large trader fall a great trouble and ultimately become loser.
  • #20
  • Edited 10:25am Apr 5, 2019 6:50am | Edited 10:25am
I don't think there is a single big reason for any trader failing in the financial markets. There are probably multiple reasons, one or more applying to each individual trader. Looking back at my own personal experiences and the thoughts that used to cross my mind, I could identify the following reasons for failure.

1. Uncertainty: "Should I close this losing trade or hope for a reversal soon?" "Should I let my winning trade run, or should I not take any chances of prices turning against me?" "How do you reliably identify a reversal?" "Isn't the market totally random? With no hope of there being any effective method of prediction?"

2. Impatience: "I know about and can easily identify a couple of highly reliable patterns, but I don't know how long I will have to wait for those patterns to occur. I haven't done any trading all this morning and afternoon. Better have some action. Hmm, let's see, the currently developing pattern looks promising. Let's put on a trade and hope for the best."

3. Gambler's Attitude: "Well, the market is supposed to be totally unpredictable anyway. I somehow feel lucky today. My last couple trades closed in profit. Let's go for broke and try to cash in a real big profit on the next trade." "Well, the last few trades ended in losses. Let's try to recover all losses in a single big trade."

4. Lack of Professionalism: "Well, I am in here for some little fun. Let's put on some trades and see how the adrenaline rush feels." "I don't have the time or patience to really learn about market analysis." "I have no idea where the market is supposed to go. Let's see if some guru is offering some trade recommendations. I will go along with them and see how it goes."

5. Lack of Discipline: "I know I am breaking my own rule and against all good sense. Just doing it this once won't hurt me, I guess."

6. Lack of a Carefully Worked Out Trade Plan: "I don't know how to develop a workable strategy. The market looks simple enough. I can't see how a strategy will improve my odds."

7. Fear Paralysis: "Oh boy, I can't see the market clearly. Don't know what is going to happen with the trade I just put on. Getting an urgent call of nature. I don't know whether I am coming or going. I think I will lie down and not look at the market at all. Taking a few deep breaths will probably make me feel better."

8. Overconfidence: "I probably know all there is to know about trading. After all, I have keenly observed the market since I was introduced to it about six months ago."

9. Blame Game: "Oh I know, all the big brokers and banks are after my money. No small trader like me can hope to really compete against them. Better quit before I lose every single penny I have."

10. Self Sabotage: "I really don't deserve the success I have been inadvertently getting recently. Better quickly get rid of all the profits I have earned. Money is the root of all evil anyway."

There may be other reasons too. But the effect of all the above mental states and attitudes is, unless they are overcome and successfully handled, that they lower your chances of eventual success. Just like in any other profession, consistently successful trading requires long and hard study of the market for several years and an unwavering will to succeed.

Losses are inevitable in trading, especially in the earlier part of one's trading career. But as the old cliche goes: "Quitters never win and winners never quit."

Happy Trading.
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