Why do Newbies Lose? | Page 6 | Forex Factory

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  • #101
  • Aug 15, 2013 3:47pm Aug 15, 2013 3:47pm
That's funny, almost made me choke on coffee..I guess that's the other side of the coin but I prefer to be part of the small minority of winning traders, and as for requests on greasing the wheel, hit the nearest service station..
  • #102
  • Aug 15, 2013 3:57pm Aug 15, 2013 3:57pm
hahaha, good one Mingary !

but, R u really serious?

well, ive heard similar from a friend hey, im benefitting myself, right? lols
  • #103
  • Edited Aug 16, 2013 2:41am Aug 15, 2013 11:15pm | Edited Aug 16, 2013 2:41am
Quoting Starry
hahaha, good one Mingary ! but, R u really serious? well, ive heard similar from a friend hey, im benefitting myself, right? lols
Yes I am serious and your friend is (similarly) correct.

Quoting Forexnuts
That's funny, almost made me choke on coffee..I guess that's the other side of the coin but I prefer to be part of the small minority of winning traders, and as for requests on greasing the wheel, hit the nearest service station..
To remain a winning trader you must understand / know your enemy / adversary so you can defeat her.
  • #104
  • Aug 16, 2013 9:11pm Aug 16, 2013 9:11pm
because they turn forex into blackjack or roulette, slots etc without being aware of this at all and when they are, its to late!
  • #105
  • Aug 17, 2013 6:37am Aug 17, 2013 6:37am
Here's how I met with my emotional side:

http://www.forexfactory.com/showthread.php?t=438280
  • #106
  • Aug 17, 2013 10:25am Aug 17, 2013 10:25am
Many newbies loses in Forex market just because of lack of basic knowledge and experience and it is necessary that they should focus on learning first and then go for earning and in Forex learning is very important for every trader.
  • #107
  • Aug 19, 2013 12:08am Aug 19, 2013 12:08am
Quoting Mingary
{quote} Yes I am serious and your friend is (similarly) correct. {quote} To remain a winning trader you must understand / know your enemy / adversary so you can defeat her.
Heck, yes! I would love to know my adversary/enemy though I wouldn't paint that person as as "she"..LOL
  • #108
  • Aug 20, 2013 12:55am Aug 20, 2013 12:55am
Quoting hedging
Many newbies loses in Forex market just because of lack of basic knowledge and experience
it's a good point, but what do you think, maybe this is just the stigma made by brokers so that they have an easier time manipulating prices and taking newbies money?

it's not as big of a loss if you already expected it from the beginning.
  • #109
  • Aug 20, 2013 1:49am Aug 20, 2013 1:49am
Quoting rooicol
Hi all, Just wondering what exactly do newbies do to lose? I mean when you open a trade, regardless of any analysis you do, you are issued a 50:50 chance of winning/losing, so how do you lose overtime? Well, i guess the first thing is trading cost, every trade you make it will cost you about 3 pips, so if a newbie makes 100 trades, 50 wins and 50 losses of equal size, they will end up down 300 pips. I think newbies have a tendency to make many many trades in a short period of time, the market rise a few pips and they buy, the market falls a few...
Its the same as why do babies fall when they just started to learn how to walk. They haven't learned walking yet and can be applied also to traders... They haven't learned how to trade yet. But when a trader keeps adding money and still loses, the trader has not yet experienced the most painful situation of losing money (up to his/her capacity to handle pain) just like a baby who will remember for the rest of his/her life that a heated flat iron (happened to me when I was 16 months old) is not to be touched.
Fear prevent possibilities, and so does Greed
  • #110
  • Aug 20, 2013 1:56am Aug 20, 2013 1:56am
Hi x trader - newbies lose because it isn't actually a 50/50 chance of it working. You can put a 100 trades on when you don't know where to get it and where to put your stop losses in and all 100 fail. Trial and error never works. In fact if you got a couple of winners using a toss of coin, that would be dangerous as it would lead you to believe that system works, but it doesn't. Good education is the only way to ever make it work and even then 95% can't make it work. The good news is that when you have a great trading plan from education you do then make money if you are disciplined, patient and have really good trade management in place. Hope that helps?
  • #111
  • Aug 20, 2013 2:29am Aug 20, 2013 2:29am
Quoting gillh1
Hi x trader - newbies lose because it isn't actually a 50/50 chance of it working. You can put a 100 trades on when you don't know where to get it and where to put your stop losses in and all 100 fail. Trial and error never works. In fact if you got a couple of winners using a toss of coin, that would be dangerous as it would lead you to believe that system works, but it doesn't. Good education is the only way to ever make it work and even then 95% can't make it work. The good news is that when you have a great trading plan from education you do...
That is exactly what I said or meant by the word LEARNED (Education, discipline, risk management, patience), you just spelled it out. I tend to use one word to express my thoughts.

My signature spelled it already. Education is already a given.
Fear prevent possibilities, and so does Greed
  • #112
  • Aug 20, 2013 2:37am Aug 20, 2013 2:37am
Hi xtrader - you're right I missed the fact I was actually replying to rooicol's question like you. I hadn't seen you had done quote and reply. Good to know we are on the same page!
  • #113
  • Aug 20, 2013 3:27am Aug 20, 2013 3:27am
I think it's because new traders are sorely mislead in what it takes to trade profitably. They read a bit about MACD and RSI and expect to be able to make money.

I'm all for technical analysis, but consider this thought...


All brokers, most of who are Market Makers, who essentially want you to lose, teach technical analysis. They run seminars on it and flood their education material with info on charts, indicators, patterns and what not. If these strategies they taught worked, they would make A LOT less money than they do - some might even struggle to stay open. They aren't going to teach you something that works. They try to persuade you that fundamental analysis doesn't work but the truth is it's the only thing that really moves the market. Just look at non-farm payroll releases. But if they put the work into showing you how to conduct proper fundamental analysis, it will look a lot harder and a lot less appealing than drawing a few lines and adding a few indicators to trade profitably.

I mean, do you really expect to beat the guys at Goldman Sachs and Merrill Lynch etc. because you can see a 'cup and handle' in the charts?...

No, it's going to take a lot more than that.

However, my personal strategy is still 80% tech and only 20% fundamental - but it took me 3 years of trading everyday to learn how to use their techniques properly.

Just my 2 cents though
  • #114
  • Aug 20, 2013 5:19am Aug 20, 2013 5:19am
Hello,

I personally blew my account multiple times at the start, and for me the main reasons were:

1. Seriously over leveraging - I'm talking about 20% per trade, and when my very first account was sized at over $1.2k, you could probably imagine that my nerves weren't too healthy in that aspect.

2. No education - This is partly because of the advertising with regards to Forex. Many ads say something like work from home, anyone can do it, no business costs, can be run from anywhere, and so I just deposited and started to trade. I didn't have a clue as to what a Bollinger Band was, or what a Moving Average was.

3. Money Management - When I put in 20%, and was down say 50 pips, I'd put in 30% on the same direction. "It has to go up", I'd say to myself. But it would go anywhere but up. I'd martingale myself with only 3 levels, and I'd be out in a few hours. Those were the days...I didn't even learn the benefits of using 2-3% of my account per trade.

So those were the most common points for me personally.
  • #115
  • Aug 21, 2013 1:17am Aug 21, 2013 1:17am
Wrong risk management, too much leverage and I guess newbies don`t analyse the charts as the should.
  • #116
  • Aug 21, 2013 1:33am Aug 21, 2013 1:33am
I work for a forex education company..this is what i have noticed thus far on the people that fail at forex verse the people that end up making a full time income. The ones that fail, they think they are the next genius superstar trader so break ALL the rules, such as no stop loss, risking a high percent of the account on one trade, having unrealistic goals that lead to overtrading (such as turning a few hundred into a million...) The ones that do well understand trading can only be successful if you are consistent, thus they aim for 3 to 5% returns & have a huge trading account, & they realize its a game of odds...if 90% of traders fail what makes them special? Nothing...so the BEST they can do is be humble, realistic & eventually they prosper.

This is my two cents I could be way wrong, who knows.
  • #117
  • Aug 21, 2013 2:24am Aug 21, 2013 2:24am
Quoting Scalptastic
... and I guess newbies don`t analyse the charts as the should.
Most of them don't even look at their charts. They simply use EAs found here and there ... Especially super grid/martingale EAs.

No need to learn how to trade while all can be done automatically by fancy robots !
MT4/MT5 EAs/Indicators/Alerts coder
  • #118
  • Aug 22, 2013 1:52am Aug 22, 2013 1:52am
Quoting FerruFx
{quote} Most of them don't even look at their charts. They simply use EAs found here and there ... Especially super grid/martingale EAs. No need to learn how to trade while all can be done automatically by fancy robots !

lol
  • #119
  • Aug 22, 2013 7:00am Aug 22, 2013 7:00am
A big part of why they lose is the lack of a defined trading plan. Check out my article on Yahoo which helps walk through how to develop and stick with a defined trading plan.

http://voices.yahoo.com/article/9925...043.html?cat=3
  • #120
  • Edited 12:51pm Aug 22, 2013 12:13pm | Edited 12:51pm
Quoting danwils
A big part of why they lose is the lack of a defined trading plan. Check out my article on Yahoo which helps walk through how to develop and stick with a defined trading plan. http://voices.yahoo.com/article/9925...043.html?cat=3
http://voices.yahoo.com/article/9925...043.html?cat=3

What it really means

1. Know your risk tolerance
You don't know what your risk should be only after you have blown a few accounts. Pain will tell you.
2. Know your risk/return ratio
how can you know this if you don't have a track records and even with the track record the future is unknown
3. Know your entry
If you could know your entry would you take a losing trade?
4. Know your exits
Same as 3.
5. Follow your "If-then" syntax"
What works today may not work tomorrow
6. Trade your plan
Look at the above, can you really have a plan based on that?
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