Why do 95% of traders lose? | Forex Factory

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Why do 95% of traders lose?

  • Poll

  • why do 95% of traders lose?
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  • #1
  • First Post: Aug 7, 2007 1:02pm Aug 7, 2007 1:02pm
I like to submit a poll: why do 95% of traders lose?

Poor money managment

Bad system

Inexperience

Failure to Identify correct market direction

All of the above
  • #2
  • Aug 7, 2007 1:04pm Aug 7, 2007 1:04pm
Too late now... the option comes as you start the thread.
  • #3
  • Aug 7, 2007 1:09pm Aug 7, 2007 1:09pm
best mods in the internet land
  • #4
  • Aug 7, 2007 1:16pm Aug 7, 2007 1:16pm
I would have added another choice if were creating you poll on why 95% traders fail.

Not learning how to discipline yourself in life and trading.


To paraphrase on old adage -
"To waste* is a terrible thing to a disciplined mind."

(*to waste time, effort, sleep, money and skill on unprofitable habits, and disctractions)
  • #5
  • Aug 7, 2007 1:22pm Aug 7, 2007 1:22pm
Not much doubt so far, is there?
  • #6
  • Aug 7, 2007 1:52pm Aug 7, 2007 1:52pm
As much fun as these threads can be, the answer is that it doesn't matter. What matters is what it takes to get into the 5%.
  • #7
  • Aug 7, 2007 2:20pm Aug 7, 2007 2:20pm
Quoting FXEZ
As much fun as these threads can be, the answer is that it doesn't matter. What matters is what it takes to get into the 5%.
Fxez,

I disagree, you see knowing WHY so many fail is the key to being successful!

A person will never get into the 5% without EXPERIENCE of past mistakes, good traders are not born overnight, takes time and many failures.

Here is some questions to think about:
When a trader experience a loss, why did it happen?
Was it just part of trading?
Did the system fail?
What was the money management used?
Did I get the direction wrong?

You see most traders blow up their account within three months on average.

So it does not matter why some fail?

I beg to differ!!!
  • #8
  • Aug 7, 2007 2:32pm Aug 7, 2007 2:32pm
I think I'm qualified to answer for all the loosers out there.
We loose because we are the smartest traders in the world and eventually the market wises up and does what we want it to.
I'll be dammed if I let the market make a monkey out of me!
oo oo ee ee aa aa aa
  • #9
  • Aug 7, 2007 2:49pm Aug 7, 2007 2:49pm
masterfx,

I've been trading for over 10 years and have found that studying why I made money has been much more powerful to my development than studying why I lost money. It is easier to focus on something that works and practice doing it over and over, rather than avoiding the dozens of pitfalls in an attempt to have a right outcome. Studying failure will only get you failure in the long run. Studying success brings success.

The reason is that there are a virtually infinite number of ways to lose but a limited number of ways to win. The way to get past losses is to focus on what is working, or in focusing on doing things the right way. You might say that Edison himself stated that he had found 10,000 things that didn't work in making a light bulb. But the fact is that Edison was focused on what was working in bringing him closer to finishing the light bulb, and compiling the components in the right manner. And when Edison used insight or his creative mind to create the phonograph, he did it right the first time - the only invention where he did this.

In the end, you'll get much further by modeling your behavior after those who are successful than by learning about those who lose and attempting to not follow in their patterns. That's why there are no books called "Market Duds".

Quoting masterfx
Fxez,

I disagree, you see knowing WHY so many fail is the key to being successful!

A person will never get into the 5% without EXPERIENCE of past mistakes, good traders are not born overnight, takes time and many failures.

Here is some questions to think about:
When a trader experience a loss, why did it happen?
Was it just part of trading?
Did the system fail?
What was the money management used?
Did I get the direction wrong?

You see most traders blow up their account within three months on average.

So it does not matter why some fail?

I beg to differ!!!
  • #10
  • Aug 7, 2007 3:48pm Aug 7, 2007 3:48pm
Quoting KudzuFX
I would have added another choice if were creating you poll on why 95% traders fail.

Not learning how to discipline yourself in life and trading.

To paraphrase on old adage -
"To waste* is a terrible thing to a disciplined mind."

(*to waste time, effort, sleep, money and skill on unprofitable habits, and disctractions)
I quite agree. I also believe that discipline is key point. About a decade ago I worked as a police officer, the disciplined manner remains effective for me during trading.
Peace and Happiness through Prosperity (by Konosuke Matsushita)
  • #11
  • Aug 7, 2007 4:02pm Aug 7, 2007 4:02pm
Fxez,

I disagree, you see knowing WHY so many fail is the key to being successful!

A person will never get into the 5% without EXPERIENCE of past mistakes, good traders are not born overnight, takes time and many failures.
************************************************
MasterFX
Actually, there have been a number of studies done in sports that show without a doubt, positive imagery has great benefit to an althetes ability to learn new skills. In addition, one should concider that good trades don't always win money; therefore, one might mentally practice if then scenarios, but I'd be reluctant to call them mistakes.

I think so many people fail because they have poor control of their mental game strategy.
  • #12
  • Aug 7, 2007 4:13pm Aug 7, 2007 4:13pm
Quoting FXEZ
masterfx,

I've been trading for over 10 years and have found that studying why I made money has been much more powerful to my development than studying why I lost money. It is easier to focus on something that works and practice doing it over and over, rather than avoiding the dozens of pitfalls in an attempt to have a right outcome. Studying failure will only get you failure in the long run. Studying success brings success.

The reason is that there are a virtually infinite number of ways to lose but a limited number of ways to win. The way to get past losses is to focus on what is working, or in focusing on doing things the right way. You might say that Edison himself stated that he had found 10,000 things that didn't work in making a light bulb. But the fact is that Edison was focused on what was working in bringing him closer to finishing the light bulb, and compiling the components in the right manner. And when Edison used insight or his creative mind to create the phonograph, he did it right the first time - the only invention where he did this.

In the end, you'll get much further by modeling your behavior after those who are successful than by learning about those who lose and attempting to not follow in their patterns. That's why there are no books called "Market Duds".
Fxez,

I have alot of experience as well, I have seen many bad traders as well as some good traders over the years, some have been trading along time with minimal results.

There is a reason why this is the case.
I have just one question what are your monthly returns?

Or perhaps what was your best month in 10 years? percentage wise?

And yes I know you cannot measure success with one or two good months, it's over the long haul.
  • #13
  • Aug 7, 2007 5:12pm Aug 7, 2007 5:12pm
where did u get the 95% from?
i mean is there any legit reference for that percentage coz am trying to find a place where it confirms that??
  • #14
  • Aug 7, 2007 7:00pm Aug 7, 2007 7:00pm
I've been an independant businessman for >30 years.
I've also Traded for as long.

Something that is essential in both ventures {and I know all the other business men here and probably most of the long time Traders will agree} is to surround yourself with the best support staff in the business.

As vain as it sounds, you have already achieved that part by being here.

Good luck...
Listen + Read = Learn
  • #15
  • Aug 7, 2007 7:06pm Aug 7, 2007 7:06pm
Money & trade management is the start, middle & end. It's the only thing which works ALL the time.
The breaking of a wave cannot explain the whole sea.
  • #16
  • Aug 7, 2007 8:49pm Aug 7, 2007 8:49pm
I think its kind of like "if you have to ask how much for ..... then you can't afford it"

In-other-words "if you have to ask why the 95% (or whatever %) lose, you better find out the answer and do the opposite.... otherwise hmmm".
  • #17
  • Aug 8, 2007 12:13am Aug 8, 2007 12:13am
We'll just pretend that the 95/5 figure is correct. I don't think anyone knows for sure, but it's probably in the ballpark, maybe even a littlle conservative.

Number of winning traders = number of properly trained traders applying sound strategies and following well thought out business plans

Number of losing traders = all the rest - (minus) all those who are learning diligently from the winners.

Reasons for failing are too numerous to list, though you nailed some whoppers in your poll. Along with Kudzu's addition.
  • #18
  • Sep 22, 2007 3:28pm Sep 22, 2007 3:28pm
Any idiot can read a chart. (Hell, even I can!)

Anyone can cut and paste a nice system to work from.

Any idiot can get lucky from time to time. (Yep, I have that sometimes too!)

Anyone can follow a trend.

But not everyone has discipline.

In fact, I would say that only about 5-10% of people have said discipline. Funny how that number matches up with the successful traders.



Clockwork71
  • #19
  • Sep 22, 2007 7:57pm Sep 22, 2007 7:57pm
I think that the statement "95 % of traders fail" is wrong, it should be "95 % of people who want to become a trader fail". Pick one hundred guys from the street, you give each one of them a bistoury knife and you tell them: perform surgery on these one hundred patients. After surgery, 95 patients die and 5 patients survive. Should we say that "95 % of surgeons fail"? NO! Those guys were not surgeons or doctors, just because we gave them bistoury knifes it doesn't mean they are surgeons.

Same thing happens with trading. Sure, maybe 95 % of traders fail, but how many people within that 95 % can we consider to be "real traders"? Just because somebody is in front of the computer looking a chart and placing trades it doesn't necessarily mean that he's a trader.

That's my opinion.
"I say high, You say low, You say why, and I say I don't know..."
  • #20
  • Sep 22, 2007 8:01pm Sep 22, 2007 8:01pm
95% of traders lose because they spend 95% of their time thinking of ways to avoid losing. <Oh! I must be sure to risk only 2% which means a stop loss of no more than 50 pips. Only trade with the trend!> yada yada yada!

Everywhere I go I hear about how stupid traders are. The more I hear it the more I believe it! I need more trainning, education, discipline blah blah blah!
Experience is the best teacher. Mentors are fine, but they can't trade for you.

If traders focused more of their time on ways to enjoy trading and winning, all the other factors mentioned before (i.e. strategy, money management, discipline ect.) would fall into place.

Therefore, I suggest one must start with a winners attitude, for if you are afraid of losing, you will do just that! There's just too much negative noise pulling a trader back and fourth every day, so you must start each day believing that you can and will win!
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