Why do 95% of traders lose? | Page 2 | Forex Factory

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Why do 95% of traders lose?

  • #21
  • Sep 22, 2007 8:40pm Sep 22, 2007 8:40pm
Quoting clockwork71
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.
I'd say you hit that nail on the head. To the OP - aside from money management, the other major problem is the natural instinct to protect wins and hope for the better during losses - i.e., it's natural to cut and run when you have a bit of a profit and things start looking like they might turn bad, while most starting traders will hold on to a loss hoping it will turn around. It takes disciple to do just the opposite.
  • #22
  • Sep 23, 2007 5:45am Sep 23, 2007 5:45am
Why most fail is clear to me: lack of discipline and patience to wait for PERFECT setups, aka over-trading.

We just need to have a look at threads such as the Cable thread on the Main Discussion area: people chaotically calling entries left, right and center without stopping to think for one second whether it's the right time to enter the market. Moreover, I see people entering trades barely 30 minutes prior important news releases, or the day the Interest Rates were being announced, etc. That is just madness and asking to dig yourself into trouble.

In my opinion, a trader's job is to be 95% of the time out of the market, waiting, analyzing, seizing the opportunity, and only 5% of the time actually being involved in a trade. Instead, most of the traders actually feel the opposite: they've GOT to trade every day and under every market condition. In fact, it's my opinion that most of the days the conditions are just not there, the ducks just dont line up, and thus wisest to remain on the sidelines.

Until a trader understands that it's crucial to remain out of the market until the top-rate setup appears, he will be entering half-assed trades that will be religiously slapping their stoplosses over and over and over.

Overtrading: a novice trader's bane.
  • #23
  • Sep 23, 2007 7:44am Sep 23, 2007 7:44am
  •  mld
  • | Joined Sep 2007 | Status: Pips Raining Cats & Dogs | 85 Posts

Yes lack of discipline, not only its essential in a trader way of trading also within the trader himself, knowledge of his own strengths and weaknesses, such a discipline within is like a river flowing all the time which brings him such an awareness inside the market
mld

  • #24
  • Sep 23, 2007 8:53am Sep 23, 2007 8:53am
Quoting WTB
Why most fail is clear to me: lack of discipline and patience to wait for PERFECT setups, aka over-trading.

In my opinion, a trader's job is to be 95% of the time out of the market, waiting, analyzing, seizing the opportunity, and only 5% of the time actually being involved in a trade. Instead, most of the traders actually feel the opposite: they've GOT to trade every day and under every market condition. In fact, it's my opinion that most of the days the conditions are just not there, the ducks just dont line up, and thus wisest to remain on the sidelines.

Until a trader understands that it's crucial to remain out of the market until the top-rate setup appears, he will be entering half-assed trades that will be religiously slapping their stoplosses over and over and over.

Overtrading: a novice trader's bane.
Exactly. I remember many months of bringing up charts, and trying to figure out whether to go long or short. Already the pressure was on, as if trading was simply picking the right direction at any given moment. My stoploss was like a magnet. So I used wider stops--that'll teach them. Same results.
It was a long time before I surrendered to the wisdom of the elders and learned to sit on my hands.
  • #25
  • Sep 23, 2007 11:44am Sep 23, 2007 11:44am
Quoting Micro-MiniMe
95% of traders lose because they spend 95% of their time thinking of ways to avoid losing.
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.
Actually, we are on the same track in regards to discipline, but how we define discipline and how it is obtained has yet to be discussed in detail. http://en.wikipedia.org/wiki/Discipline

As previously discussed, a traders mind must be disciplined in several ways: i.e. knowing when to get into or out of a trade, when to stay out of or in a trade, when to trade ect. ect... How the process of discipline occurs can vary from person to person but the only true, lasting form of discipline occurs as a result of the experience of the trader, and not that of the disciplinarian. Much can be learned from a mentor, but to suggest that discipline is only obtained through a mentor is only partialy true.

At first mention of the word discipline, I imagined the stern old grade school teacher enforcing a set of rules for behavior, but then I realized that many times throughout my life I was able to become self disciplined simply out of the desire to do what I knew was in my best interst and without the disciplinarian's guidance. This was possible due to previous experiences and the lessons I had learned from them, not because someone with more experience was telling me what to do.

As I stated earlier, traders should start with a winning attitude. This is not to say we should expect to only win, but if you observe young gifted athletes as I have, you will notice invariably that although they are not yet fully developed they are focussed on winning at all times. The less gifted athletes tend to brush off losses with an attitude of "it's only a game" and the non-athletes have little desire to win much less participate. The gifted athletes don't need much encouragement or guidance because they have a burninng desire that guides them like a magnet to do the right things at the right times and in the right places. This brings me back to the importance of experience for without it there is no way of truly knowing anything.

Wouldn't it be nice if success could be attained simply by submitting to the guidance of an 'elder' or disciplinarian.
  • #26
  • Sep 23, 2007 11:57am Sep 23, 2007 11:57am
I think its all about how we manage our equity specially on lot sizing, far to many is trading with to high gearing and trading in a irationel way.

revoke
  • #27
  • Sep 23, 2007 3:44pm Sep 23, 2007 3:44pm
Most traders fail to become Traders due to lack of commitment to Direction.

Not Direction of Price Movement but, moreso, Lack of Direction in their attack on Market Weaknesses.

"I tried MA's for Over a Month... They don't work"

"I tried S/R for 2 months... They don't work either"

"I tried Price Action combined with Fundies for over 4 Months and they totally confused me."

Total of 7 months of study and Only saw the Negative.

Some of the MA's had to work as well as the other 2 examples I forward.

The expectancy of 'Plug & Play' FX Trading is an Urban Myth that should be Hung... Drawn... & Quartered.
Quote me if you like.
  • #28
  • Sep 23, 2007 3:54pm Sep 23, 2007 3:54pm
Very interesting thread.

Many a thing is necessary to have success in a particular field.

If somebody says: "This is how people loose and avoid those mistakes! ", then I will listen.

If somebody says: "This is how people win and do what they did!", then I will listen as well.

I am listening...
....but now I have to go on and do what it takes to make it work for myself.
Be like a post stamp! Stick to it until you get there!
  • #29
  • Jan 4, 2008 9:27pm Jan 4, 2008 9:27pm
Quoting Bemac
Most traders fail to become Traders due to lack of commitment to Direction.

Not Direction of Price Movement but, moreso, Lack of Direction in their attack on Market Weaknesses.

"I tried MA's for Over a Month... They don't work"

"I tried S/R for 2 months... They don't work either"

"I tried Price Action combined with Fundies for over 4 Months and they totally confused me."

Total of 7 months of study and Only saw the Negative.

Some of the MA's had to work as well as the other 2 examples I forward.

The expectancy of 'Plug & Play' FX Trading is an Urban Myth that should be Hung... Drawn... & Quartered.
Quote me if you like.
as all the indicators shows in you post. do you using them all at one time?

if so. then when trend end/start. do you see what are command between them? if you do. you should know when trend is end/start.

get indicators that you fell right for you. study them in what condition trend is end and start. that is my way to success.

always wait until trend to start is better. unless you been see indicators shows very good to keep continue.

I think the reason why 95% of trader failed because...

1. they belived what other trader said.
2. they do not using indicators.
3. does not wait until trend start. (jump to do trade)
4. hope for the best (do not using stop loss. and hope the trend going to be back in next day or week if brought wrong side)
5. greedy.
  • #30
  • Jan 4, 2008 9:38pm Jan 4, 2008 9:38pm
Maybe 95% lose because they morons!
Id say most lose because they have no system that is reliable. It takes a long time to develop and think through.
ITs about concepts and how fast it takes you to come to the conceptual change. The market is a puzzle .. IT can be adapted to.
Indicators don't adapt. Systems need to adapt based on market movement and you have to adjust to that movement.
  • #31
  • Dec 31, 2009 7:00pm Dec 31, 2009 7:00pm
I explain why I believe 95% of trades fail on this FF thread:

http://www.forexfactory.com/showpost...&postcount=212
  • #32
  • Aug 8, 2016 3:32pm Aug 8, 2016 3:32pm
Traders lose because the game is designed for them to lose. It's rigged. You can't win at forex any more than you can win playing slot machines in Vegas - both are rigged to separate suckers from their money.
  • #33
  • Aug 8, 2016 3:34pm Aug 8, 2016 3:34pm

  1. why do 95% of traders lose?
  2. Poor money management
  3. Bad system
  4. Inexperience
  5. Failure to correctly identify market direction
  6. All of the above
  7. View Poll Results


NONE OF THE ABOVE. Traders lose because it's a rigged game - traders lose because forex is designed for them to lose.

  • #34
  • Aug 8, 2016 4:38pm Aug 8, 2016 4:38pm
Quoting gravitist
why do 95% of traders lose? Poor money management Bad system Inexperience Failure to correctly identify market direction All of the above View Poll Results NONE OF THE ABOVE. Traders lose because it's a rigged game - traders lose because forex is designed for them to lose.
False.

Brokers have to make money to provide the platform for traders to engage in the activities they engage in.

If you have failed to understand the actual mechanics of the market, that is your fault.
If you are good at something, never do it for free--Joker
  • #35
  • Aug 14, 2016 5:55am Aug 14, 2016 5:55am
Quoting jmn5611
{quote} False. Brokers have to make money to provide the platform for traders to engage in the activities they engage in. If you have failed to understand the actual mechanics of the market, that is your fault.
couldn't agree more just another person unable to accept maybe they did something wrong. It's quite amusing how some people can never accept they were wrong or just simply bad at something. great post.
  • #36
  • Mar 23, 2017 5:38am Mar 23, 2017 5:38am
There are many specific reasons behind losing in Fx trading, I want to emphasis on money management that you have mentioned first. Actually despite of good trading knowledge that’s not possible at all to lead a comfortable trading life if you don’t know how to manage money.
  • #37
  • Mar 23, 2017 6:05am Mar 23, 2017 6:05am
Actually, 100 percent of traders lose.

The thing is, some lose more and some less. Some take more green than red pips.

As to why is this like it is, well...first thing is inexperience, second thing is "it just isn't for them".
Many other things are there to be accounted for sure, and together you get a solution to the equation...
"Don't lose your cool, and you will fare well".
  • #38
  • Apr 25, 2017 10:42pm Apr 25, 2017 10:42pm
95% loser, I am not agree. I think only 70-80% are failing in this business , actually loss is an inevitable in Forex trading but loss comes when we trade blindly and without having knowledge , experience and skill, otherwise Forex is a lucrative business if we will do it with proper planning and strategy.
  • #39
  • Apr 25, 2017 11:06pm Apr 25, 2017 11:06pm
I'd say poor money management and lack of experience. I was paper trading since Oct 2013 and just went live this month. It took this long to get my confidence up and trade a full quarter without a losing month. That was the goal and I stuck to it. So far, April has been a good month.

Time to treat myself to a VIP table in Vegas!
  • #40
  • Apr 30, 2017 7:07pm Apr 30, 2017 7:07pm
Where did you get the 95% from ?
Ask yourself that question, and decide on the trustworthiness of the source.

You see, the majority of the "95%" club, expect achieving different results from other traders, while doing the exact same things over and over again just like the rest.
The truth is hidden from you
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