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Why do Newbies Lose?

  • #121
  • Aug 22, 2013 2:58pm Aug 22, 2013 2:58pm
1. 1. Know your risk tolerance
You don't know what your risk should 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?

Good questions Mingary.
Here are my responses:
1. LOL, the risk tolerance of a long-term investor will be much smaller than a day trader. This is what I'm getting at. Older folks who are investing their retirement will not be able to tolerate as much risk as a younger trader.
2. If you know your entries and exits (stops and limits), you DO know your risk/return. Only take trades that will give you a bigger return than you risk.
3 & 4. YES! You are going to have a ton of losing trades, but you can define how much you lose. If you lose 3 trades with -1% but win one trade with +4%, you have a net gain. This is a successful way to trade in the long term.
5. That's exactly right. But if you do the same thing over and over and you have incremental gains and small losses, this will profit in the long run. You aren't trying to get more winners than losers, you are trying to build a trading account.
6. This is the only way to have a plan.
  • #122
  • Sep 8, 2013 12:27pm Sep 8, 2013 12:27pm
There are many reasons that newbies loss in Forex the are lacking of basics of Forex trading. Newbies should practice more and more to increase their trading skills and knowledge.
  • #123
  • Sep 12, 2013 2:25pm Sep 12, 2013 2:25pm
Some Reason of losses of newbie at forex are: 1. Lack of experience.2.dependency Over Signal. 3.Trading without purpose.4. Trade with Large risk.5. Lack of Trading Strategy. So be careful. Happy trading
  • #124
  • Sep 13, 2013 3:28am Sep 13, 2013 3:28am
Quoting danwils
1. 1. Know your risk tolerance You don't know what your risk should 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? Good questions Mingary....
Oh, thanks, I was looking for smth like that^^
  • #125
  • Sep 15, 2013 1:26am Sep 15, 2013 1:26am
Hi all I'm new to this forum, in fact I'm pretty new to any forum.
I have been trading for over 10 years but only been serious for about the last 5-6.
I have been enticed to come on this forum by friends that believe that I have experience and knowledge learnt over the last 10 years to be able to show the pitfalls that are there for those that are not aware.
I only trade one pair and I only trade a method not a system. Been there. doesn't work in the long run.
My method is really simple it's just looking at the charts and seeing things that most traders don't.
Do I win all the time, hell no, but I make a double digit return on investment every single month.
Max Dymon
  • #126
  • Sep 23, 2013 2:31pm Sep 23, 2013 2:31pm
Quoting neo1599
The reasons as per my experience: 1- They take forex to be a casino. If you think you are betting then law of averages what will happen after some time. 2- Infrastructure You need the correct set-up for trading. This includes: atleast 2 net connections(I currently have 3). Fail-safe power options. Back-up of charts. 3- Money management/Leverage: Understanding leverage is very important. If you are putting in 100 USD and taking trades worth 10000 USD well chances are one mis-step will spell the end of your account or worse make you place irrational...
Yes of course newbies are lack of basic knowledge and trading skills and also in them the greed factor is high. Newbies should increase their trading knowledge and experience then they will be able to trade with patience and discipline.
  • #127
  • Sep 29, 2013 4:04pm Sep 29, 2013 4:04pm
I guess this is a never ending post, because there are every day people which get interested into trading. I want to say, that all what is written here is right, for me personal, after analyzing my mistakes in trading, greed, no patience and the "need" to make fast a lot of money, where the knock-outs for my first two accounts. I am still on the way to find my personal way of trading, because i know it is possible to be profitable at the end of a month or year.
I think self evaluation is the best way to increase trading skills.
Good luck to all.
  • #128
  • Sep 29, 2013 6:39pm Sep 29, 2013 6:39pm
Quoting LongTermFX
I think self evaluation is the best way to increase trading skills.
MT4/MT5 EAs/Indicators/Alerts coder
  • #129
  • Oct 1, 2013 6:42am Oct 1, 2013 6:42am
Newbies lose because:
1. They think they are something special. It takes everyone else years and years and most never get there, but they think they have it cracked in a few weeks. Everyone is stupid.
2. They have read a few articles, watched a video or two and know all the answers. After all, how hard can it be; price goes up or down!

So really, ego and arrogance and probably as most are male, too much testosterone. I guess it might help if you are female or gay.
  • #130
  • Oct 1, 2013 6:48am Oct 1, 2013 6:48am
Quoting jen101
So really, ego and arrogance and probably as most are male, too much testosterone. I guess it might help if you are female or gay.
I am sure that we all are like this simply because we are humans ...
MT4/MT5 EAs/Indicators/Alerts coder
  • #131
  • Oct 3, 2013 2:27pm Oct 3, 2013 2:27pm
Quoting 5ysfx
Most of them wanna be milioner in one day...
Newbies are also in hurry to get maximum profit in a very short time and so greed factor is increased in them and they trade with no proper trading plan and strategies because trading requires proper knowledge and skills.
  • #132
  • Oct 3, 2013 2:39pm Oct 3, 2013 2:39pm
still being a brand new trader..
Heres been my mindset over the first week of FX trading.

First days
1. Im gonna just time it and get lucky and when i lose ill get out
2. Crap its going down ill hold out cause mabye it will go up.
3. Its not going up but now ive lost too much to give up so ill stay in it..
4. crap. 20% of capital is gone im out..

Next period
1. Alright lets look at the trending
2. ummm.. which timeframe?
3. uhh... 5 minute thats good ill just get in right here at post a trade.
4. switch to 1 hr+ TF... umm.. uh oh..
5. Close trade that i just fubard.

Where im at now
1. setting S&R and SL and TP
2. Identifying trendlines as a whole on multiple TF
3. Getting some insight from news etc
4. Using stoch to gauge price changes
5. entrys only when its optimal not when i feel like making a trade.
6. Exiting when the system tells me rather than my "gut"(i cant trust it yet)
7. Oh look. a profitable trade.
8. Crap.. next trade was a reverse profit of the last.
9. welcome to trading.

Thats kinda how ive seen myself evolve in the past week

and the problem is this with alot of people
They dont ever get past the first or second periods. and blow so much money that there entire trading scenario is based on getting out of the hole they dug....
The hardest psychological thing for me at the moment.
Is making a profit on a trade and then taking a loss on another and canceling each other out... that wall of emotion isnt fully up yet and makes me upset when i make the mistake. even though with my small capital account ($90). those 3-7 dollar trades feel like alot. and they are (5-10%).

i to had that get rich mentality. now i just hope i close the day 10 pips up.
  • #133
  • Dec 25, 2013 9:27pm Dec 25, 2013 9:27pm
lack of discipline and money management
  • #134
  • Dec 27, 2013 6:13am Dec 27, 2013 6:13am
Lack of experience has to be the big one!

You can read all the 'how to' guides but still be useless when it comes to actually making a trade!
  • #135
  • Jan 1, 2014 7:16am Jan 1, 2014 7:16am
I've got to put partial blame on many of the brokers here.

I mean, have you seen some of their websites? Like TradeFort and some others. When you go there they make trading seem so damn easy, anybody can do it, and you will earn big time.

Who isn't going to be enticed by that? Who doesn't want easy money?

Trading is really hard, the learning curve is steep. The market is brutal and relentlessly unforgiving.

Many personalities in the world we live in today just can't handle it.
  • #136
  • Jan 1, 2014 8:12am Jan 1, 2014 8:12am
Quoting PhilDune
I've got to put partial blame on many of the brokers here. I mean, have you seen some of their websites? Like TradeFort and some others. When you go there they make trading seem so damn easy, anybody can do it, and you will earn big time. Who isn't going to be enticed by that? Who doesn't want easy money? Trading is really hard, the learning curve is steep. The market is brutal and relentlessly unforgiving. Many personalities in the world we live in today just can't handle it.
Totally agree with you mate.
  • #137
  • Jan 4, 2014 10:11pm Jan 4, 2014 10:11pm
Interesting thread, everybody. I’m new here and thought this would be a good place for my first post. As a newbie, I’ve made many of the mistakes mentioned above: trading without a clear plan, cutting winners short, letting losers run, using poor money management, etc. I think a major reason newbies make these mistakes is because we want all our trades to be winners. Despite what we learn when researching forex, we don’t accept the fact that forex is a numbers game in which many trades will be losers. We therefore cut winners short in fear that they’ll become losers. We let losers run in the hope that they’ll recover. And when we incur losses, we make rash trades to make up for those losses. We see trades as good or bad based solely on whether they gain or lose pips, instead of judging them based on whether or not they’re executed according to our trading plan. This topic comes up on all forex websites and forums, and everywhere else forex is discussed, but for most of us, this seems to be a lesson that only the market can teach us.
  • #138
  • Jan 6, 2014 2:44am Jan 6, 2014 2:44am
As a total noob myself (first post here), I think noobs loose because live accounts behave differently to demo accounts. I've only ever had demo accounts and I am having spectacular success with news trading (using a java program called Forex News Gun, which I think is developed by the guys at Forex Peace Army). I am pretty sure that on a live account I will not have any success because of slippage. Can anyone confirm this?
  • #139
  • Jan 11, 2014 8:36am Jan 11, 2014 8:36am
There are many reasons why newbies blow up or lose their accounts. Things such as:

1. Unrealistic expectations. Thinking they can make 70 % or more in a week or a month in profit.

2. Not using a stop-loss.

3. Unwilling to be wrong and take a loss.

4. Poor training. Many so called gurus are not real traders but clever marketers.

5. Believing in a magical black box system.

6. Emotionally unprepared.

There are many others but this is a good start.
  • #140
  • Jan 15, 2014 2:27am Jan 15, 2014 2:27am
It depends on the traders how they work hard to develop their trading skills and learn from their mistakes. The reason of newbies loses because of lack of basics of Forex trading.
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