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The Reason why 95% Traders fail

  • #281
  • Jan 5, 2010 6:45am Jan 5, 2010 6:45am
Quoting LadyPenelope
Oh, Mr T. At the age of 102 you are a touch cynical! You are of course completely correct. One should do all the brain stuff, the planning, before one approaches one's trading platform, and then leave said brain at the door (except bare minimum required to punch the order keys and then shut down the pee cee.)

Looking at your profile: One minute charts. Very ADD, you gotta love 'em. However, these candles take forever to close, don't you think? Ticks are much more fun!

This is why a stupid person will out trade a clever person who developed the method but passed it onto the stupid person.

Under thinking will lead to nothing but losers.
Over Thinking will lead to no trades at all. ( my current state )



Cynical ohhhh yes, 1 of my best features
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
  • #282
  • Jan 5, 2010 7:05am Jan 5, 2010 7:05am
Quoting LadyPenelope
One should do all the brain stuff, the planning, before one approaches one's trading platform, and then leave said brain at the door (except bare minimum required to punch the order keys and then shut down the pee cee.)

Looking at your profile: One minute charts. Very ADD, you gotta love 'em. However, these candles take forever to close, don't you think? Ticks are much more fun!
These two paragraphs contradict themselves. How can you plan a trade if you are trading Ticks?
  • #283
  • Jan 5, 2010 7:11am Jan 5, 2010 7:11am
Quoting kenkomo
These two paragraphs contradict themselves. How can you plan a trade if you are trading Ticks?
Agreed. These are two separate conversations.

Ticks are trading flagrante, simply for amusement!
Happy trading, pip pip!
  • #284
  • Jan 5, 2010 8:31am Jan 5, 2010 8:31am
I've always felt that if I plan before on how I will react at what levels then I make much smarter trades... There is always a reactionary moment at the time of the trade, but if you know the background, where your S/R is, what the trend has been, it makes that instantaneous decision all the better. So, to chime in with Lady P, you have to have just the right amount of planning, not over not under... Just know the territory before you jump in...
  • #285
  • Jan 5, 2010 8:56am Jan 5, 2010 8:56am
Quoting 4xCoach
I've always felt that if I plan before on how I will react at what levels then I make much smarter trades... There is always a reactionary moment at the time of the trade, but if you know the background, where your S/R is, what the trend has been, it makes that instantaneous decision all the better. So, to chime in with Lady P, you have to have just the right amount of planning, not over not under... Just know the territory before you jump in...
Some wise words in here, but I like these the most!
  • #286
  • Jan 5, 2010 8:59am Jan 5, 2010 8:59am
Quoting 4xCoach
... Just know the territory before you jump in...
Most importantly, pre-trade planning allows one to manage the drama of it all. The perfect delivery of abusive yet creative dummy spits if things go badly. And self-congratulatory yet nonchalant "no, no, really, it was nothing" type remarks, with associated gladioli-waving, when it all goes to plan!
Happy trading, pip pip!
  • #287
  • Jan 5, 2010 11:35am Jan 5, 2010 11:35am
Quoting 4xCoach
I've always felt that if I plan before on how I will react at what levels then I make much smarter trades... There is always a reactionary moment at the time of the trade, but if you know the background, where your S/R is, what the trend has been, it makes that instantaneous decision all the better. So, to chime in with Lady P, you have to have just the right amount of planning, not over not under... Just know the territory before you jump in...
  • #288
  • Jan 5, 2010 12:16pm Jan 5, 2010 12:16pm
Quoting LadyPenelope
I believe the more important question is: Why does a trader SUCCEED?.
I believe it's important to phrase your questions in the positive.
Yes, the brain only accepts positive commands.
  • #289
  • Jan 5, 2010 1:21pm Jan 5, 2010 1:21pm
Quoting Tjpld
From my point of view profit targets have some serious drawbacks.........
Many thanks for your very comprehensive reply.

I agree that technically based profit exits are superior to optimized X:1 RR or X-pip trailing SLs. They supposedly have some the backing of some current market rationale.

I have a couple of very carefully selected entry setups that have thus far delivered a ~70% win rate, without compromising RR too badly. I guess that's a big factor as to why I place higher importance on entries than many traders. Another of my entries is placed around S/R, allowing a tight SL and therefore potentially high RR trades. Although the profit in this case comes from exiting at high RR, the low risk entry was instrumental in creating that opportunity.

I guess it's also because I relate 'importance' directly with the attainment of a mathematical edge. Entry gives one the advantage of being completely selective, while with exit we have the added complication of protecting profit as the trade evolves, plus the psychological difficulties. So in that sense one could easily argue that exits are more important. It is a question of perspective.

My personal view of entries and exits being 'mirror image' probably comes from the fact that I use S/R a lot. I'm definitely not saying that, for example, just because one's entry might involve a pinbar, that one has to wait for a pinbar to exit.

About your statement "entries can't wipe you out but exits can". Agreed. However, I use technical criteria to set the SL location, and then use position size to manage the level of risk, e.g. the SL could be any of 10, 20, 30 pips away, yet the overall risk is only 1%. So, if I may be pedantic, I see the exit point as being immaterial risk-wise, it is the 1% that is key.

I think I understand what you mean by a "mental edge". IMO a system would need to be incredibly robust to not only overcome the odds presented by the market, but also accommodate the emotional foibles of the trader. Psychology is obviously vital, but I see that as something that I need to work on myself (and, in my case, a lot of work is still needed!), rather than compromising my methodology. Despite the discretionary aspects in my approach, I like to make a clear distinction between method and execution, so that if I review a losing trade, I know which area most needs addressing.

Of course, everybody's approach to trading is different, and this will inevitably lead to different perspectives. At the end of the day, it's largely semantics; profit is the universal, objective goal.
  • #290
  • Jan 12, 2010 12:05pm Jan 12, 2010 12:05pm
Quoting hanover
I think I understand what you mean by a "mental edge". IMO a system would need to be incredibly robust to not only overcome the odds presented by the market, but also accommodate the emotional foibles of the trader. Psychology is obviously vital, but I see that as something that I need to work on myself (and, in my case, a lot of work is still needed!), rather than compromising my methodology. Despite the discretionary aspects in my approach, I like to make a clear distinction between method and execution, so that if I review a losing trade, I...
Well said. Especially the part where profit is the universal, objective goal
  • #291
  • Jan 12, 2010 11:13pm Jan 12, 2010 11:13pm
There's a very good post here by Dopey on the reasons for 95% failure rate. The whole thread is worth reading, IMO. This is a topic that has been discussed many times already.
  • #292
  • Jan 12, 2010 11:59pm Jan 12, 2010 11:59pm
Another reason why... they don't like experiments apparently
  • #293
  • Jan 13, 2010 3:48am Jan 13, 2010 3:48am
Quoting swingtrader
coz 95% lacks DISCIPLINE
true!
  • #294
  • Jan 13, 2010 5:03am Jan 13, 2010 5:03am
I think the biggest problem in "tradingeq" - emotions...
  • #295
  • Jan 24, 2010 2:46pm Jan 24, 2010 2:46pm
Quoting Jaquille
Yes, the brain only accepts positive commands.
And the brain only remembers the positive results and suppresses the negative results. You remember what would have been profitable but forget those trades that would have been unprofitable.
  • #296
  • Jan 25, 2010 12:18pm Jan 25, 2010 12:18pm
The reason Fx is a scam and everyone is looser is that the banks have secret software that acts like malware and hides on your PC, but no AV or spyware can detect it.

The way it works is when you take a position it informs the banks where your stop is and in a little the market moves against your stop to take you out.

It has nothing to do with being a poor trader in a fast market with high leverage, or being able to understand market dynamics, or even having excellent chart reading skills or a trading edge.

Nope. This was cloned from an alien spaceship and is the reason the banks make so much profit trading the worlds largest market - they make that profit by stealing from you.

So don't think for one minute the market is telling you that your trading skills are not up to scratch... just blame the aliens, the banks and the secret malware on your PC, and move on to something easier where the trend lines and candles really work.
  • #297
  • Jan 25, 2010 12:34pm Jan 25, 2010 12:34pm
Quoting Parazite
The reason Fx is a scam and everyone is looser is that the banks have secret software that acts like malware and hides on your PC, but no AV or spyware can detect it.

The way it works is when you take a position it informs the banks where your stop is and in a little the market moves against your stop to take you out.

It has nothing to do with being a poor trader in a fast market with high leverage, or being able to understand market dynamics, or even having excellent chart reading skills or a trading edge.

Nope. This was cloned from an alien...
That was simply AMAZING !!!!
Many share my views with me. But I don't share them with them...
  • #298
  • Jan 25, 2010 12:36pm Jan 25, 2010 12:36pm
Quoting hanover
There's a very good post here by Dopey on the reasons for 95% failure rate. The whole thread is worth reading, IMO. This is a topic that has been discussed many times already.
Thanks David. I don't know how that Dopey post slipped by me until now.

I have to say it again: "Dopey For President."
  • #299
  • Jan 25, 2010 12:37pm Jan 25, 2010 12:37pm
Quoting Parazite
The reason Fx is a scam and everyone is looser is that the banks have secret software that acts like malware and hides on your PC, but no AV or spyware can detect it.

The way it works is when you take a position it informs the banks where your stop is and in a little the market moves against your stop to take you out.

It has nothing to do with being a poor trader in a fast market with high leverage, or being able to understand market dynamics, or even having excellent chart reading skills or a trading edge.

Nope. This was cloned from an alien...
Hahahaha! classic post!
  • #300
  • Edited Jan 26, 2010 10:12am Jan 25, 2010 2:09pm | Edited Jan 26, 2010 10:12am
Quoting serpo
Where? Prove where.
The flaw is that you described a winning trade as a loser. If I walk away with 28 pips I'm not going to bitch about the broker getting 2 pips, much less call it a loss. As for 1,000 trades, I'll be quite happy with the 28,000 pips and gladly let the broker have 1,000 pips for his services. I'll pay anyone 3.5% of my gains if they make those gains possible for me.

Of course, I wouldn't be silly enough to expect to win all 1,000 trades, but that's using your example.

DTM
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