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Why 95% Of All Traders Fail 202 replies

Why most 'traders' fail 12 replies

Why Most People Fail At Trading Infographic 3 replies

The Reason why 95% Traders fail 341 replies

Why Traders fail despite of good system available here in Forum?? 8 replies

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Why do 99% of the people who wants to be traders fail?

  • Post #21
  • Quote
  • Edited 10:49am Feb 4, 2008 10:33am | Edited 10:49am
IMHO there are two reasons.

Confusion and lack of discipline.

The confusion can be improved if you use only three different kind of indicators. for every aspect there should be at least one (but can also be two or three which should confirm each other).

- a trend finder i (like MACD histogram)
- a trigger i (like MA-crossover)
- a breakout i (like TL-break)

if all three kinds of inicators are in one timeframe even better.

The requiered discipline should keep you out of everything which is not within this plan.
/ ... clarifying decisions ... /
Quoting tdion
Forex is gambling. It's only a matter of time before a huge losing streak comes.... That's why so many people lose.

Don't you agree with me, Seeking_Light?
Personally I think most people lose NOT because of the losing streak, but because they abandoned their technique once that happens.

Losing streak is as normal as breathing. Everything goes through that 'down' period; businesses, relationships, the seasons, pro card players, economy etc.

But if you know how to manage, it's just temporary set back.
Working towards CME membership
99% of forex traders fail not because it is something they do wrong BUT because it is one of the most volatile markets to trade.

Forex is like a casino. You can beat the market and the casino once or twice. Maybe even for a while. But in the long run you will lose. The odds are against you.

If you understand why there are so many forex brokers offering you live accounts for as little as $500, then you will understand why 99% of traders lose their money. You won't find any place where someone would say: "Please deposit $500 and you get to win a fortune." Ok the only other place is the casinos. Oh so here we are back to the forex=casino thing...lol

If you wanna make money out of forex then do the following 3 things:

1. Write a forex book
2. Become a forex broker and charge other people to trade on your platform.
3. Become a forex mentor.

That is the only way you will make money with forex in the long run.

You get 2 kinds of forex traders

1. You get the forex trader with the money, but not the experience.
2. You get the forex trader with the experience, but without the money.

Most traders on this site unfortunately falls in group 1.

Trade forex for a hobby. Open a $5 000 account and trade the daily, weekly or monthly charts. Yes you will be lucky to make 20% return on investment per year. But hey it is like my broker told me 3 years ago: "Sir, there is no easy money to be made in forex." At first I didn't believe him. Now i do. In 3 years i grew my account then lost half of it. And now i am almost at break even again.

Best of wishes to everyone wanting to make a living trading forex. Please do not use money you cannot afford to lose. May you find a few pips along the way. May you catch the trends and not get stuck in the ranging markets...lol
Sure most FX traders fail, so do most traditional businesses. I believe most fail because they think it's easy, they don't have a plan, they lack self discipline, and they're followers instead of leaders. Look around.

I don't know if any of you ever owned a traditional business, but if you have how many times have you spent $20,000+ on advertising and didn't even break even? It happens, just like in FX sometimes you won't break even!
  • Post #25
  • Quote
  • Edited 4:17pm Feb 4, 2008 4:02pm | Edited 4:17pm
Quoting GulfCoastPip
Sure most FX traders fail, so do most traditional businesses. I believe most fail because they think it's easy,
Great points, GCP, this one I had to comment on.

I didn't think it was easy, I just sorely underestimated the difficulty!

Or I could say "It's not really hard to win at forex. It's just harder than I thought."
Quoting tdion
Forex is gambling. It's only a matter of time before a huge losing streak comes.... That's why so many people lose.

Don't you agree with me, Seeking_Light?
Buying and selling of Currencies is NOT Gambling. I doubt Ford, GM, Chrysler, Banks, Multi-national Corperations, Countries, etc.....actually Gamble.

Go to a Casino....throw some dice.......THAT is gambling.....once you place a bet on the table, you can't take it back, can't scale up or down or out....once those dice are in the air. There is no info on the shooter, no way to chart is ability to actually make points, or throw numbers...etc.....

I shot craps for many a year....There is a hugh difference!

My beliefs only.....and I don't gamble any longer at dice
Fxj
Proper Prior Planning Prevents Piss Poor Performance
I believe most traders - regardless of them being forex traders, futures traders, commodity traders, or stock traders - fail because they don't have a real edge.

Most of the reasons I read from forums, books, articles only focus on discipline, money management, adequate capital, experience, etc...

However, if you only have discipline, money management and enough capital to trade and you still are missing a real edge, it'll only be a slower death.

I also believe it's a lot easier to be disciplined when you have a real edge than when you don't have any edge.

If you seem to be on the wrong side of the market most of the times, the temptation to tweak your system around is always around the corner. How can you be a disciplined soldier if you have no reward from what you are doing? Unless you are a masochist, I can't really see how someone can stay disciplined using a losing strategy.

What about experience? Well, experience can just help so much. If you still have no edge, your experience will be brutal and will only tarnish your confidence permanently.

In conclusion, a trader fails because his strategy doesn't provide him with an edge good enough to make money.

Many losing traders think that money management can fix this handicap and try their luck with "averaging down" until they blow up their account and go broke.

If you don't have an edge, don't trade. Forget about ratios, money management, discipline, experience...it's all useless if you don't have a real edge.
I read from magazine : currency trend very well.

So why it trend so well and yet so few made it ?
omg, what the hell kind of advice are being allowed to post on these forums...I mean come on. I'm all for freedom of speach and all but alot of this so called helpful advice is coming from people who don't have any real world expereince in this field, who have failed miserably and have a need to let the whoel trading community know, or who is still struggling to make it as a trader themselves.

It's almost like a bunch of bloodsucking vampires came out at night and jumped up at the opportunity to voice their very flawed beliefs...thereby furthing confusing newbies even more. It's hard enough to get this game going right from the beggining, why ruin it for everyone else? If something is not working for you, ask for help...don't come here and bitch and complain about you giving up on yourself because guess what, nobody here wants to look at that mess.

If anything, I suppose this thread is appropiate for these kinds of people, because this kind of depreciating self-talk is primarily the number one reason why traders fail, and it's the very thing all newbie traders should avoid from the get-go.
Quoting snakeye
I think you are one of the true traders from the 1% category. I think you have a lot to offer. I didn't think that I would actually find anyone from the elite group. I agree with most of the things that you say. I think when become elite trader none of the technical or fundalmental really matter. At this stage, trading becomes a second nature that takes very little effort. You see the trade even before it happens. This just my humble opinion.

Can you explain your mindset, psychology, pertaining to trading as well as the life in general. If you don't want to share your techniques, that's OK. Like you said it's all about what is going in our head. I could have the best technical system, yet I won't see it the you see it, if mind set not where it should be. I think you could make biggest contribution to all of us who want to be like you.
In order to be a successful FX trader you need to deal with your fears and the greed factor. Ego also plays an amazing part.

I am a well rounded experienced businessman who has had many life experiences. I recall how hard it was to take my first loss in FX trading.

My first live trade was done on March 9, 2006 and I never had even one loss in my first 80 FX trades.

During June 2006, I moved my currency business over to Man Financial Canada and it was in June 2006 that I had my first loss.

Even though the loss was only $100 it was the hardest loss EVER.

My EGO was beating my Common Sense and I would take large draw downs always coming out ahead because I am good at trading FX with the 90 day trend.

However by taking the $100 FIRST LOSS ever in my FX trading career I finally had my Common Sense DEFEAT my healthy Ego.

I am thinking of starting a NEW Thread to teach folks how to become a successful FX trader.

Until later
{Promotion Removed}
Quoting Warren Forex

In order to be a successful FX trader you need to deal with your fears and the greed factor. Ego also plays an amazing part.
Are you saying a fearless, confident trader with no ego will be successful? I agree with ItalianSharp. You have to have an edge. Until you do, you will stay in constant psychological distress from trading.
Quote
My first live trade was done on March 9, 2006 and I never had even one loss in my first 80 FX trades.
A few posts back it was 75, now it's 80? Hmmmm...
Quote
I am thinking of starting a NEW Thread to teach folks how to become a successful FX trader.
My gut feeling just from your 2 posts on this thread is that not many people will be able to use your system. And if you tell them to demo for 2 years, or until they have 80 winners in a row, you won't have much of a readership. Not trying to be negative, just realistic.

However, I will read your thread and pick up what I can use.
How many times have you seen a football player interviewed responding with old worn out cliches such as "We control our own destiny" or "We have to execute our game plan" blah blah blah - but so true.

Nothing is easy. If you approach tasks in life half-assed and content with just getting by, what do you think the result will be?
History is written by the victors.
  • Post #33
  • Quote
  • Edited 8:18am Feb 5, 2008 6:40am | Edited 8:18am
Quoting Money-RX
How many times have you seen a football player interviewed responding with old worn out cliches such as "We control our own destiny" or "We have to execute our game plan" blah blah blah - but so true.

Nothing is easy. If you approach tasks in life half-assed and content with just getting by, what do you think the result will be?
This may be true in every single case and may not.

What is true in every single case is that the pro football player drilled and drilled and drilled and worked out for all he was worth, and practiced until he was ready to drop, day in, day out, year after year after year to get that good. The hype works just fine AFTER he is an excellent athlete.

Tiger woods doesn't just get up in the morning and say, "I'm a winner" and go have a big breakfast. He hits hundreds of balls EVERY day. Yes, he controlled his destiny - BY HITTING MILLIONS OF BALLS.

I'm not gonna beat Tiger just by "thinking positive". There has to be a tremendous amount of action that goes along with all that wonderful mindset, to the point where all the positive cliches become almost insignificant, their only worth, possibly, to help you keep going despite obstacles and setbacks.

However, data, statistical analysis, knowledge, will beat out positive thinking any time to inspire confidence and keep you going on track. If you KNOW your system has an edge, and you hit 3 or 4 out of 5 trades, you're gonna feel pretty good about your trading in short order. When you have a loss, you can either "think positive", or fall back on your numbers and knowlege for confidence. I'll take the latter. Rah rah all you want, but show me the freakin' numbers!

Using "positive thinking" in place of doing homework is definitely "half-assing" it.

If you got data, you need no faith.
Quoting tdion
LOL "meant for the game" as if it is genetic. What a joke. Successful forex trading is based on luck, not intrinsic ability or skill.
No, it's not a joke mate.

Whether you like it or not, there ARE people out there who SIMPLY CAN'T CONTROL THEIR EMOTIONS. They can't keep them in check. And if that's the case, what chance does one have with MM?

In addition, if you're saying it's "luck" and "gambling", maybe you should try roulette as well.
Quoting ItalianSharp
I believe most traders - regardless of them being forex traders, futures traders, commodity traders, or stock traders - fail because they don't have a real edge.

Most of the reasons I read from forums, books, articles only focus on discipline, money management, adequate capital, experience, etc...

However, if you only have discipline, money management and enough capital to trade and you still are missing a real edge, it'll only be a slower death.

I also believe it's a lot easier to be disciplined when you have a real edge than when you don't have any edge.

If you seem to be on the wrong side of the market most of the times, the temptation to tweak your system around is always around the corner. How can you be a disciplined soldier if you have no reward from what you are doing? Unless you are a masochist, I can't really see how someone can stay disciplined using a losing strategy.

What about experience? Well, experience can just help so much. If you still have no edge, your experience will be brutal and will only tarnish your confidence permanently.

In conclusion, a trader fails because his strategy doesn't provide him with an edge good enough to make money.

Many losing traders think that money management can fix this handicap and try their luck with "averaging down" until they blow up their account and go broke.

If you don't have an edge, don't trade. Forget about ratios, money management, discipline, experience...it's all useless if you don't have a real edge.
Italian Sharp, this is the most wise post I have read on here for a long time. You should consider writing a book. But then again I had to agree with you as everything you say above, I already had it in my signature below. And yes, I did find an edge, not a grail, but still an edge. And it's the only reason I make money. But the reality is, few people will understand what you wrote above or they will simply miss the message !!!
Quoting PipStar
Italian Sharp, this is the most wise post I have read on here for a long time. You should consider writing a book. But then again I had to agree with you as everything you say above, I already had it in my signature below. And yes, I did find an edge, not a grail, but still an edge. And it's the only reason I make money. But the reality is, few people will understand what you wrote above or they will simply miss the message !!!

I agree as well. If anyone here reading this really wants a edge I will teach you how however you need to invest at least 6 hours a week in your time.

I want no reward other than to teach and share with you.

The edge really simply is superior knowledge of what is really going on. Listenting to all the GUESSPERTS is a waste of time.

They ALL are too close to the Forest to see the trees.

I WIN PLUS 80% of ALL my FX Trades.

I average OVER 20% increase in Net ASSET value.

You never will become as good as I am since I am involved in FX trading 18 hours a day. I get up at 2:00 AM EST to trade the Europe open. I use Risk Management, Money Management. I only trade three or four pairs.

I only trade with the trend. I use technical for entry and exit. I try to close all positions at the end of the day. I do not over trade. I only trade when there is a good reason to put on a trade. I trade news events. I trade using a 5 minute chart and a one minute chart for day trading.

I will start a new thread early next week.

Good Trading All !!!
{Promotion Removed}
Quoting Warren Forex
I agree as well. If anyone here reading this really wants a edge I will teach you how however you need to invest at least 6 hours a week in your time.

I want no reward other than to teach and share with you.

The edge really simply is superior knowledge of what is really going on. Listenting to all the GUESSPERTS is a waste of time.

They ALL are too close to the Forest to see the trees.

I WIN PLUS 80% of ALL my FX Trades.

I average OVER 20% increase in Net ASSET value.

You never will become as good as I am since I am involved in FX trading 18 hours a day. I get up at 2:00 AM EST to trade the Europe open. I use Risk Management, Money Management. I only trade three or four pairs.

I only trade with the trend. I use technical for entry and exit. I try to close all positions at the end of the day. I do not over trade. I only trade when there is a good reason to put on a trade. I trade news events. I trade using a 5 minute chart and a one minute chart for day trading.

I will start a new thread early next week.

Good Trading All !!!
I agree, the London session is required for FX Trading. Unluckily for you that you need to get up at 2:00 AM.
Are you really sure, 18 hours working in a day just for the money??
Trainee at UBS Investment Banking
I know I'm going to be hated for what I'm going to write, but I'm going to do it anyway because I think it could still be enlightening (to few).

GENERIC PART
Most of the people who wants to be traders fail because most of the people of the world fail anyway whatever they try to accomplish. Most of the people have fat wives, ugly children, small houses, minimal education, zero self-esteem, boring (if not unbearable) jobs and accept to succumb all the time to their arrogant bosses at work and hysteric relatives at home. I know it is very sad, but it is a truth: most of the people of the world fail because they are losers.
Now, if you don't believe what I'm saying, be honest, just go out and walk a little bit in the streets around your house: how many Claudia Schiffer or Albert Einstein do they live in your neighbourhood?
We are a result of genetic selection. Genetic selection most of the time produces average elements that will never do anything special in their life, and will never win anything in any context that is even just a little bit more challenging. Only very rarely genetic selection produces first-rate elements, maybe only 1% of the time, that in itself is the answer to why 99% of the people who wants to be traders fails.

TRADING SPECIFIC PART (not only forex)

  1. trading seems easy. This is the number one reason people fail at trading. You see all that money going up and down all day long (and with forex also night) and it seems real, concrete, tangible, it seems like a lake so full of fishes that you can see them jumping and swimming and calling you to just go there and easily catch them. Only later you discover they are piraņa.
    .
  2. losers are losers and in the deep of themselves they know they are losers. Knowing this they try all of their best to avoid doing hard things and focus themselves only on easy things. The problem here is that trading seems easy, so losers think trading is just the perfect thing for them to do. Instead of working hard to have a better job, a more complete education, a more beautiful wife, more self-esteem and so on (these are all hard things to do) they just prefer to trade: it's more easy! So trading in itself naturally attracts more loosers than talented people.
    .
  3. losers feels more urgency to start trading (read: to start making something that is easy) exactly after they have just got a bad stroke in their life, like after having been fired at work, or their wife left them, or having contracted a big debt with a creditor, or (for youngers) having failed at school or college, and so on. They start in the worst case scenario, under strong pressure and just after having discovered how losers they are.
    .
  4. trading in itself is not any harder than a lot of other jobs of this world, but in most countries of the world there are no official, widely esteemed and well recognized schools that teach trading. Vast majority of the time you will only find ambiguous gurus, suspicious mentors, lofty traders that promise to reveal you "the deeply hidden secrets of trading that will enrich you well beyond your wildest dream in a few weeks". There are of course good and honest mentors, but you have to find them, and they are rare. In fact being the world of wannabe traders populated by so many losers a lot of scammers exist because they know it's easy to fool losers.
    .
  5. trading is hard because whoever gets really very good at it only rarely feels the urgency to teach his knowledge to other people. They usually teachs to some of their relatives or best friends and that's it. Even when you find honest mentors you will soon discover that while they are truly good as trader, and it's true that they make a living out of trading, it is also true that they are not any outstanding champion of trading. They are just good and honest average traders with distinct ability in teaching. You will never get private mentorship from the real champions unless you are already very close to them.
    .
  6. trading is hard because being the knowledge in this field so unorganized tons of totally false myths flourish at the speed of light and soon become the "established truth" for the vast majority of wannabe traders that, being made of losers, are especially good at getting mixed up on what is good and what is crap. For a clear example of what I'm talking about here please read this post that I consider to be one of the most useful and intelligent post you could ever find on FF.
    .
  7. people fail at trading because most of the time instead of studying, learning and practicing the markets they waste all of their energies reading on forums like FF the complainings and the laments of losers that cry all the time that there is no way at all to be profitable with forex, that whoever says he's making money is a liar and an impostor and if someone demonstrates to be profitable showing true statements losers say it was just luck (so only very temporary success that will surely very soon be reverted to huge losses), and waste their time writing replies to that losers stuff. So, well, I think it's better I stop here.

.Ubeee.
There's some big BS'ers on this forum and a lot of you guys eat it right up.
How you act is more important than how you feel.
because 99% of the people are more concerned with the price direction and failed to recognized the price pattern

one should master the pattern b4 watching the direction

and one more thing i learn is that watching the price doesn't make the price move to my favor, but if i spent much time on this and still lost i would be frustated and started to think the following:

1. something is working against me, usually the brokers are to be blamed
2. it's impossible to make money in forex, well actually forex just works like other businesses we should be aware of the risk involve and learn how to minimize it
3. arbitrage is the only way to profit
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