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Why do traders blow a winning account?

  • #21
  • Dec 12, 2011 10:24pm Dec 12, 2011 10:24pm
Quoting bumapatria
i honestly most of the time do not use a stop loss but i know where to exit and plan it pre-trade.

in a way yes i use a 'stop loss' everyone has to imo.
trading shouldnt be treated as gambling.

its Smart gambling.

like what tao said, yes live trading has that pulse of emotion kicking in.

demo u can leave a trade and see it go into profit blah blah it barely happens live due to the decisions made etc....

it really aint easy.
Im the same, my small stops get hit everytime, now i use a large emegercy stop and ignore the draw down if i even get one. Stops were made to be hit faster than targets. its just the way it is
  • #22
  • Dec 12, 2011 10:59pm Dec 12, 2011 10:59pm
more wins --> over confidence --> increase in lot size --> big loss --> over protected --> decrease in lot size --> small wins --> overall loss
  • #23
  • Dec 12, 2011 11:27pm Dec 12, 2011 11:27pm
it's quite psychological thing that causes the loss of trading capital after a period of equity growth due to a hasty desire to achieve profits as quickly as possible.

in the initial stages of trading the trader has a trading plan and solid discipline to follow the rules of his/her strategy as a result ,the trader realizes a good and consecutive winnings with a good discipline BUT at later time psychological factor become a dominant factor and interferes after the Trader has achieved a period of consecutive winning trades due to get rich quick scheme mindset as a result BREAKING OF THE TRADING RULES follows because the trader think that easy money is possible in Forex and getting rich is a matter of trading aggressively h/she is not willing to make money trading Forex slowly and gradually . the trader getting sick of the discipline he was following in the beginning and become a gambler in order to get rich quickly.

all in all he is not treating his/her Forex trading as a business , his/her mindset is get rich quick scheme
I always knew that someday I would make it big
  • #24
  • Dec 12, 2011 11:51pm Dec 12, 2011 11:51pm
I do it repeatedly despite having my rules!!


Basically if I have a run of good trades usually with smaller positions, I then get cocky and do a riskier trade with a larger position..... inevitably wiping out very quickly what I took to build up...

I can't believe I do it even though I have my rules written in front of me...

I go back over my trade and will see a whole heap of smaller winning trades just to be taken out by one or two larger trades - trade which did not conform to my rules...
  • #25
  • Dec 13, 2011 12:01am Dec 13, 2011 12:01am
Quoting forexer
it's quite psychological thing that causes the loss of trading capital after a period of equity growth due to a hasty desire to achieve profits as quickly as possible.

in the initial stages of trading the trader has a trading plan and solid discipline to follow the rules of his/her strategy as a result ,the trader realizes a good and consecutive winnings with a good discipline BUT at later time psychological factor become a dominant factor and interferes after the Trader has achieved a period of consecutive winning trades due to get rich quick...
Thanks. can you also please enlighten what are the early signs and how to overcome this habit?
Weigh well output the loss and gain And proper action ascertain
  • #26
  • Dec 13, 2011 9:51am Dec 13, 2011 9:51am
just like gambling, I guess they have a hard time accepting that they had a bad trade, and cling to a trade in (false) hopes that it will turn around.

I guess accepting a lose is a must, second thing is always review the basics (causes of losing a trade) even if you have 1 year of exp in live accounts.

and don't let a losing trade affect your next trade. i guess most of us have been there and had to learn the hard way. best of luck.
  • #27
  • Dec 14, 2011 5:08am Dec 14, 2011 5:08am
I guess reason people throw away their profits is greed. They think they can now risk more capital and up losing a lot more. If you stick to a trading strategy and proper risk management you should earn a nice income trading.
  • #28
  • Dec 15, 2011 1:13pm Dec 15, 2011 1:13pm
Fear of success, fear of knowing that you can make it in forex.

For people who have never experienced success, and trading is one of those things where you experience success or failure on each trade, making a lot of money suddenly gives them this surreal feeling.

Having a lot more money to work with suddenly changes their thinking and act, because they're usually comfortable working with smaller amounts and not having to lose sleep over losing each trade.
  • #29
  • Dec 18, 2011 9:00am Dec 18, 2011 9:00am
idash
DID YOU FIIND SAMFEG ABOUT EXCELL SPREEDSHEET FROM TRADER 101
  • #30
  • Dec 21, 2011 2:56pm Dec 21, 2011 2:56pm
Quoting forexer
it's quite psychological thing that causes the loss of trading capital after a period of equity growth due to a hasty desire to achieve profits as quickly as possible.

in the initial stages of trading the trader has a trading plan and solid discipline to follow the rules of his/her strategy as a result ,the trader realizes a good and consecutive winnings with a good discipline BUT at later time psychological factor become a dominant factor and interferes after the Trader has achieved a period of consecutive winning trades due to get rich quick...
Thanks for your coments, they are very good.
I belive the problems is not only becuase the trader broke the rules, becuase if they broken the rules and have loses, stop with this.
The real problems start when he broke the rules and win.
Then he starting thinking he are more smart than rules.
  • #31
  • Dec 21, 2011 10:04pm Dec 21, 2011 10:04pm
by not sticking to their rules, having a rescue or an exit strategy
  • #32
  • Last Post: Dec 29, 2011 9:05am Dec 29, 2011 9:05am
Quoting usasa
Hi

I am seeing in TE many people trading nicely and gradually increasing their profit, all of a sudden, most of them throwing away all their profit and major portion of the capital in couple of trades (even after trading more than a year). I am on demo account and planning open real account next month.

I was wondering what makes them to give away all their earning in a single trade? I mean how do they lose their discipline all of a sudden?

usasa
Trade with a large margin, so when the loss or wrong position, psychology is very depressed. (Just my experience).
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