Why do you lose money in trading?

Which would you prefer: (1) A sure loss of $9000 or (2) a 5 percent chance of no loss at all plus a 95 percent chance of a $10,000 loss?

If traders don't understand this and pick the wrong answer, that's why traders fail.

Best post in this thread

But FF and YouTube are the font of all knowledge ?

Truth hurts old chap - but there you are.....

True talk, there are people in here who know their strategy so well and have many years of trading and that does not mean they have the correct answer... The point is that not everything you see in here is true or a signal to enter a trade. I blew up 3 accounts just by taking the same trades of some

Chart every day and do your analysis.... It's simple as that, you are your own enemy and your best friend in trade

Because trading is hard, and not as easy as people on youtube show it to be. You have to figure out a good strategy, backtest it, get the timing right, read the market correctly, figure out risk & money management etc etc. One mistake and maybe some bad luck and you lose money- that’s why!

Yeah. SL is important... but I find TP to be much more of a problem than SL. I know where to put SL and how much to risk, but what I don't know is where to put TP. Should I enter twice, thrice? No, it's not easy, because it depends on you entirely. The more subjective something is, the more harder it is.

I think it's because there's a sea of strategies one can use in FX and one is always jumping from one strategy to another and never really settling with any one strategy.
Risk is another thing... traders here are using leverage. Obviously, it works until it doesn't and one time it doesn't work... you'd probably be starting from scratch or very close to it, equity-wise.
No patience, self-sabotaging.

[quote=Whatevs;14766744]{quote} Yeah. SL is important... but I find TP to be much more of a problem than SL. I know where to put SL and how much to risk, but what I don't know is where to put TP. Should I enter twice, thrice? No, it's not easy, because it depends on you entirely. The more "subjective" something is, the more harder it is.[/quote

Could this givve you a clue on how to handle that going forward with practice? Hope it helps.

https://howtotradeblog.com/risk-reward-ratio/

[quote=pipibrasci;14767055] Great!! Thanks!

[quote=Whatevs;14767070] Ok Boss!
Read it over and over again while practicing at the same time.

"Worry not about what the market will give to you but what it will take from you".

Hi Thtpro ,

Sorry I missed to quote.. Thank You for sharing your though.

I have been studying Gann's work for the past 5 + years & started to learn astrology from a professional astrologer to get better understanding of Gann's work .
It's always interesting to learn & calculate them manually than the software and we can get better understanding what and why it happens and help to learning as my focus is on the studying for fun .

Thanks,
Regards,
John

Dear Friends ,

Date to watch "23-march-2024" for a major trend change usually a "Crash ".. Wanted to know your view..

Thanks,
Reagrds,
John

Losing money in trading can be attributed to several factors, many of which revolve around common mistakes that both novice and experienced traders can fall into.

Here are some key reasons:

Lack of a Trading Plan: Trading without a clear plan is like sailing without a compass. A trading plan outlines your strategy, risk management rules, and goals, providing a roadmap to navigate the markets. Without this, trading decisions are often inconsistent and emotionally driven.

Speaking of emotional trading, letting emotions like fear, greed, or hope dictate trading decisions can lead to poor outcomes. Emotional trading often results in deviating from the trading plan, such as moving stop losses, taking profits too early, or chasing losses.

Poor risk management: Not managing risk effectively is one of the biggest reasons traders lose money. This includes risking too much capital on a single trade, not take profit & using stop loss orders, or stubbornly keeping a position. Risk management is crucial to protect your capital and survive in the market long enough to profit.

Overtrading: Impatience leads to overtrading, whether to recover losses or capitalise on perceived opportunities. This often results in increased transaction costs and making trades that don't align with one's trading strategy.

At the end of the day, traders lose money because they lack the knowledge and preparation to navigate the markets. This is why education is a key piece in the trading journey at ThinkMarkets

The markets are complex, and understanding them requires continuous learning and practice. Many traders underestimate the time and effort needed to develop the skills necessary for successful trading. With volatile markets, losing is part of the journey. However, this can be mitigated through the continuous honing of your trading strategy and adjusting your plans.

3) A lot more options than the 2 you have listed.

What can happen in a Trade ?

You can make small loss ,
You can make a small profit
You can breakeven
You can make big loss
You can make big profit

So you goal should be not to make big loss ..

So why and what are the reason & possibility of making a small loss ,
So why and what are the reason & possibility of making a small profit,
So why and what are the reason & possibility of making a break even,
So why and what are the reason & possibility of making a big loss,
So why and what are the reason & possibility of making a big profit,

If we start thinking in this angle and understand and do research and build the answers , you will be able to learn .
Give enough time to learn , imagine you sow a seed and expect the fruit , then you don't understand the concept.
Same way you need to study the market, like you have a time to sow and a time to reap ..
There are lot of work in between to reap the fruit . Start understanding the concepts of when to buy and when to sell .
Many people don't know about them self, so start learning about yourself and your weakness and your core strengths.
You need to dedicate time and efforts to learn and master the new skills that you need to acquire the knowledge to make big profit and consistent way.

What is your trading Goal ? What time frame suites you ? What instrument's suites you ? What is the strategy your personality ?
You may need to do every day morning and evening routine and know how to manage your trade and what action to take .

Just enjoy learning the new skills and you need determination and never give up attitude ..when you loss any trade you will take the next trade only after you understand the mistake you make and make necessary changes to your trading rules and plan and keep building it .

It's not how much trades your made, It's all about how much profit you are able to generate end of the year /month/week.

Keep things simple and build a strong foundation ...


Regards,
John

A lot of the reasons mentioned in this thread for why people lose trades can be removed from your trading.

In fact, you can get rid of them fairly easily.

I had a hard time only risking x% of my account,
would let trades run too long before taking profit so they would come all the way back and take me out because I moved my stop up to early...and then, after getting stopped out at break even, price would go right back in the direction of my original trade,
and I refused to admit I was wrong about my trades that started losing immediately and I would stubbornly allow them to go past my stop because I knew I just had to be right. I didn't honor my original stop loss because I would keep moving the stop further and further out.

Instead, I should have reversed my losing trades at my original stop loss a majority of the time (within certain guidelines) and the rest of the time I should have just eaten the loss and waited until the next day to trade again.

HOWEVER, I am great at opening trades in the correct direction 16 out of 20 times and I am great at knowing where to place my stops.

So, I wrote all of these things down, came up with ideas for each issue and wrote it/explained it/did chart pictures for each issue and had a programmer code a trading ea that removes my repeated mistakes, forces me to do the steps in my trading process and automatically reverses my trades if/when I'm stopped out (per specific guidelines that I can verify prior to allowing the reversal to happen).

Now I just enter the stop loss price and click buy or sell and the ea does the rest. So, NO, it's not a fully automated trading ea, BUT, it IS a robot that removes my human issues, substitutes for my repeated mistakes, and allows me to be consistently profitable. It also has allowed me to trade more than 1 thing at a time.

Not only did this eliminate my repeated mistakes, it helped my mental game. I'm okay with losing because I'm ONLY trying to do my trade entry process perfectly and am NOT trying to be a perfect 100% winning trader because I can only control whether I do the process correctly and cannot control what the market does.

This is very relaxing to the brain and the body. It's also relaxing to have an automated plan in place for when I'm wrong.

You can do this too! It will take some work, some time, and some money, but it's well worth it to become a consistently profitable trader.

In fact, I would highly recommend that traders who have developed a great trading process (written, numbered if this then this steps, consistent and provable), but still blow up their accounts because of the human side of trading, should STOP TRADING AS OF THIS SECOND and use their trading time to ONLY work on writing an ea that removes your repeated personal human trading issues and have a programmer code it for you BEFORE you spend any more time trading!!!

This will be the most profitable time you have ever spent up to this time in your trading career!

These two videos also helped the mental game. They're part 1 and 2 of a series from Mark Douglas, the author of "Trading in the Zone."

Oh, losing money in trading can happen for a bunch of reasons! I think mostly it's because of not having a solid strategy or letting emotions get in the way of making decisions. Also, not setting proper stop losses or taking on too much risk can really hurt -_-

After you build decent strategy it comes to discipline , money management and psychology. Once when you put all together you will still struggle. It is just hard, that is nature of trading. In my opinion 90% is not right percentage, it is more like 95-98%

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Stupid people do stupid things.
The market is against human psychology, and there are bigger guys thinking against you.
It's not for nothing that the forex markets were opened to traders.
You have to be the best in this game.
Your biggest enemy is yourself.
Over time you will become a pro. A bloody road to the skyline.

Meditate every morning.
Learn as if you could never achieve it and as if you had to fear losing it again.
You can choose in this life.
Either you are master or slave, there is no in-between.