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Why do Newbies Lose?

  • #161
  • Feb 18, 2014 9:11am Feb 18, 2014 9:11am
Lack of money management, patients, knowledge, and discipline. That's my personal opinion.
  • #162
  • Feb 18, 2014 9:27am Feb 18, 2014 9:27am
When all is said and done etc etc................it all begins or ends as an emotion rollercoaster.
Master the emotional issue and odds start tipping your way.
  • #163
  • Feb 18, 2014 2:20pm Feb 18, 2014 2:20pm
Over trading as well
  • #164
  • Feb 18, 2014 7:54pm Feb 18, 2014 7:54pm
It's not just NewB that will loss money, also the experienced traders.

All the years of my trading, the lack of respect to risk is the most reason why traders loss money trading. If a trader ONLY sees the reward, the chances are he/she will not make it in this business.

Cheers,
FxTurtle
Fear prevent possibilities, and so does Greed
  • #165
  • Feb 19, 2014 9:22am Feb 19, 2014 9:22am
Quoting xtrader101
It's not just NewB that will loss money, also the experienced traders. All the years of my trading, the lack of respect to risk is the most reason why traders loss money trading. If a trader ONLY sees the reward, the chances are he/she will not make it in this business. Cheers, FxTurtle
R E S P E C T

Really admired your post, I think the difference between newb n the experienced one is that newb only trade for profit, taking high risk, without patients and without even analyzing the market and experienced trader wins (not always) because of their discipline patients and money management . I would like to tell a story when i started late back in 2003 i remembered my first position that i opened was long eur/usd and that also with 1 lot having only $500 equity and within a fraction of seconds my account was wiped out.. and later when i saw the chart again the eu went so high that if i would had more equity that time i could have made more then $4500 the very next day, but i am feeling very good now that i lost my money that time maybe because i acquired knowledge patients and discipline after that evil event.....
  • #166
  • Feb 19, 2014 10:11am Feb 19, 2014 10:11am
The answer lies within the question.
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #167
  • Feb 19, 2014 2:44pm Feb 19, 2014 2:44pm
I would contend that traders lose because they focus too closely on too few markets at too small a time frame and with too much risk per trade. And they try too hard to predict the market in an attempt to feel smart/right instead of just reacting to what the market is doing.
There's always money in the banana stand.
  • #168
  • Feb 27, 2014 2:44am Feb 27, 2014 2:44am
Quoting LizardGizzard
I would contend that traders lose because they focus too closely on too few markets at too small a time frame and with too much risk per trade. And they try too hard to predict the market in an attempt to feel smart/right instead of just reacting to what the market is doing.
Adding on, the total emotion control crap....being a new trader too, I mostly sold too quick or sell too slow. either way caught up and totally swallowed by the market...
also, if they are new to forex, the idea of being able to sell n enter position so easily is tempting as well. Most tend to sway to the allures of day trading and scalping which for me myself...is too dam dangerous especially if they did not observe news and trade during the wrong time periods
  • #169
  • Feb 27, 2014 2:06pm Feb 27, 2014 2:06pm
I think its most due to lack of discipline, patience and commitment to one strategy what causes most newbies to lose, me included

Also I think that saying one cannot get rich trading is plain dumb, ppl got very wealth playing poker and the win ratio is far worst than trading, so if you can get rich gambling with a worst win ratio, but cannot trading, this means at least to me that the main difference between professional poker players and professional traders is the amount of balls they have towards taking risk and dealing with it. Just my 2 cents based on personal experience of a ex professional heads up poker player
  • #170
  • Feb 27, 2014 3:16pm Feb 27, 2014 3:16pm
Quoting fuzz
the main difference between professional poker players and professional traders is the amount of balls they have towards taking risk and dealing with it.
If you have the nerve to play high stakes poker, then the same nerve should allow you to play for high stakes in any activity. Hence the difference is not the stake level, but the confidence that you have the ability to successfully implement a a winning strategy, and the strategy comes from a having a comprehensive knowledge (and experience) of the underlying activity.

Gameplay aside, I guess some differences between poker and forex are:
1. In poker, you can choose who you play against (experienced opponents or easy-beat newbies).
2. You can't bluff the market!
3. It's NOT a good idea to go "all in" at forex!
  • #171
  • Feb 27, 2014 7:42pm Feb 27, 2014 7:42pm
Quoting hanover
{quote} If you have the nerve to play high stakes poker, then the same nerve should allow you to play for high stakes in any activity. Hence the difference is not the stake level, but the confidence that you have the ability to successfully implement a a winning strategy, and the strategy comes from a having a comprehensive knowledge (and experience) of the underlying activity. Gameplay aside, I guess some differences between poker and forex are: 1. In poker, you can choose who you play against (experienced opponents or easy-beat newbies). 2. You...
Choosing who you play against, bluff'n out opponents out of pots with the worst hand and going all-in actually doesn't matter if we're talking about tournament gameplay imho, because in the end it boils down to the WR one can achieve based on he's skills against a large sample size of tourneys played.

I do agree with you when you say what really matters is the confidence that you have to successfully implement a winning strategy, but bear in mind in poker the better you get, and move up in stakes, the average playing field gets tougher and more skilled, and this influences one's WR and introduces more variance. With that in mind "moving up in stakes" in forex don't make things harder if the trader can maintain the same confidence.
  • #172
  • Feb 27, 2014 10:30pm Feb 27, 2014 10:30pm
They lose so that the experienced ones can profit.
  • #173
  • Feb 28, 2014 7:07am Feb 28, 2014 7:07am
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...
Sorry, why 50/50? Have you ever heard about the analysis, about forecasts? If you hadn't, then how you make your 50/50? it's must be a loss.

And one more: Poker? You think, that FT is a gamble? Then its would be 0/100.
  • #174
  • Feb 28, 2014 8:17am Feb 28, 2014 8:17am
Quoting MichaelSmith
{quote} Sorry, why 50/50? Have you ever heard about the analysis, about forecasts? If you hadn't, then how you make your 50/50? it's must be a loss. And one more: Poker? You think, that FT is a gamble? Then its would be 0/100.
First its never 50/50 because we have to pay spread or commissions. And second I don't think its gamble, and also I don't think poker is gambling if you're playing with the odds in your favor, just like trading. Both are zero sum and you like it or not , both activities have huge similar aspects.
  • #175
  • Edited 8:51am Feb 28, 2014 8:50am | Edited 8:51am
They lose because they can't stick to it long enough. There are guys like myself who have paid the dues to be able to still trade profitably and work in the industry. (yes I know my account says new, but I forgot my old details, and have been around since 2006ish)

My point is, you gotta stick to it. Noobs will lose at everything ---that's why they're called noobs! Once you overcome the learning curve, you can start to get good at it. The thing is, that it takes a good amount of tenacity to stay in the game after losing, and most don't then label the trading game as a losers only game. Everything takes time to learn and be good at, why should trading be any different?
  • #176
  • Feb 28, 2014 9:51am Feb 28, 2014 9:51am
Quoting dutch45
They lose because they can't stick to it long enough. There are guys like myself who have paid the dues to be able to still trade profitably and work in the industry. (yes I know my account says new, but I forgot my old details, and have been around since 2006ish) My point is, you gotta stick to it. Noobs will lose at everything ---that's why they're called noobs! Once you overcome the learning curve, you can start to get good at it. The thing is, that it takes a good amount of tenacity to stay in the game after losing, and most don't then label...
+1. Absolutely agree with this. Before newbie starts to trading, he need to learn how to get it to profit. Also many factors of trading are depends of broker they choose. I already had changed three!!! brokers and only with last I really got profit by using technical analysis.
  • #177
  • Feb 28, 2014 10:03am Feb 28, 2014 10:03am
"Why do newbies lose?", or better yet, why should newbies win?
"To hold, you must first open your hand. Let go." - Lao Tzu
  • #178
  • Feb 28, 2014 10:18am Feb 28, 2014 10:18am
I'll add a little to this: If you are new to trading and you are winning, watch out! Usually that will lead to over confidence and then to trading with bigger 'shoes' than you should.

Some advice: Get a broker that will allow trading on a smaller level. When I started trading FX full lots were only available, but shortly after they introduced mini and micro lots. But there is a caveat to this, when you trade with very small size, you are not always as sharp, as the fear of losing pennies might not bother most. I never traded anything under one lot when I started, and because of that, the lessons learned drove home a little harder, as I have had friends that have been trading about as long as I have, but still make silly mistakes, and the difference was that they learned with pennies and never learned key things.

So to put that together, trade very small to start, and try everything! Take scalps long trades, hedging, take risks, and even the stupid ones, but trade with pennies or less. Then give yourself a timeline of when to bump up trade size after you have got a hang of the basics like order entry and exits, strategy development etc. For example, trade micro for a year and move to mini within a year, and so on. But trade with money you can afford to lose. If you just stay on the micro level all the time, you might miss certain psychological lessons. And don't forget that this takes commitment, and a certain amount of being comfortable with risk.
  • #179
  • Mar 2, 2014 7:32am Mar 2, 2014 7:32am
Over a year ago, I shared a mechanical system that I read about in a book and some indicators with a friend. I had even done boring manual backtests using Excel to show it should in theory be profitable. It was by no means a super system, it was average at best, but with a good money management system it would mitigate the drawdown and at least return profit that would exceed a savings account by a large margin. I also wrote a user guide with exact instructions to follow. The guide roughly went like this:

  1. Demo trade for at least 6 months
  2. Always follow the rules in this guide. E.g.: Entry rules, Exit rules, Risk rules

First mistake he made was he went live after 1 month before he even learned about the concepts of maximal drawdown, RR, profit factor, risk of ruin, correlations, etc. His rationale was that he would just follow the rules and with the risk management modelled on Excel he would be okay.

Soon afterwards, he started changing the rules in the guide without verifying if these changes were beneficial (he didn't consult me). He started introducing new rules and concepts that I could not understand and then kept increasing risk. He also kept adding money to the account, and the lot size is essentially based on a % of the account size. Since he rewrote the guide, he did not technically violate rule 2. He is a lawyer by education and regularly plays poker (gambling I guess), and like many people, would like nothing more than to escape the rat race.

As bad luck would have it, a drawdown occurs after he (a) increases risk and (b) increases account size, thereby wiping his earlier gains.

I have a personal rule in that I don't tell people what to do with their real money. Fake demo monopoly money, yes I will yell at people to do this or that, and cite as much evidence as possible, but real money changes things. I got upset that he had disregarded my guide and I stopped monitoring his trades and let him find his own way regarding forex. This might be hyperbole, but the system he was trading was not recognisable to me anymore. Last time we talked about trading, he said he was in charge of a PAMM account, and needed my help with MQL4's TICKVALUE being different between brokers. I probably sound like a sucky friend, but I wouldn't have trusted him with my money if he couldn't cite what his RR ratio, profit factor, win ratio, etc, were.

I have been too busy to keep in constant contact lately and I haven't explicity asked him if he has quit forex, but with the MT4 Build 600 update, he still hasn't asked me for updated indicators and it is impossible to trade without them.

  • #180
  • Mar 11, 2014 3:17pm Mar 11, 2014 3:17pm
Hi, im new, but form my point of view, people lose because THEY DONT WANT to lose.
If you take care about your trading, and not your equity, you take better decisions.

My two cents
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