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Why you lose money and will always lose 42 replies

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Why do Newbies Lose?

Quoting Amira
Well, as a newbie I spent a few months reading and trying to figure out a way to learn how to trade. I mean, I know how to open the account and place an order. I made it through so many trades with some profits and losses. I just see so complicated charts and indicators. I also see more complicated news that I should follow to know if I should sell or buy. The whole thing is still overwhelming for me. I stopped trading for a few months just to read. The more I read, the more I feel so much lost. So, please give me an idea about how to become better....
Don't stop trading , and do it with live accounts , keep your eyes open and you will find many opportunities , to avoid huge losses keep lot size smallest possible.
Quoting Amira
Well, as a newbie I spent a few months reading and trying to figure out a way to learn how to trade. I mean, I know how to open the account and place an order. I made it through so many trades with some profits and losses. I just see so complicated charts and indicators. I also see more complicated news that I should follow to know if I should sell or buy. The whole thing is still overwhelming for me. I stopped trading for a few months just to read. The more I read, the more I feel so much lost. So, please give me an idea about how to become better....
they don't say trade with the trend for nothing

once you can see the main trend(s) - with one or two or a few indicators
then you will have the basis for a system

the rest is just entry / exit signals / SL and learning how to trade around and on the major news
in uptrends and downtrends
and then find a very good broker

that's all there is to trading - nothing else
unless you want to trade everything and everymove - then you are asking for trouble
My personal experience is that, newbies lose because they don't have:

 

  1. Good money management
  2. Patience
  3. Mental endurance

Point 1 can be learned. Point 2 and 3 can only come by repeated practice.

Most people loose because we've been fooled by randomness.

We see a pattern and it works...but did it really work? We see a break out and it worked but only produced a small move, something like 1:1 or 0.5:1

We say it worked although it didn't really. That's what fooled by randomness means and there's actually a book with that title.
The reason that most newby traders fail seems to me is over confidence and over simplification of the whole process. I mean when i was brand new i remember looking at charts and thinking.... "it cant be that hard... it can only go two ways"I began to see $$$ signs and could see myself in just a short amount of time sitting on my yacht with my laptop living the dream. Of course this led to over trading and extreme risk taking which invariably led to crushing defeat. I thought i was smart enough that i didnt have to trade with the trend like all the other wimps.... ha ha..... what a dip shit i was. Another big one for me is not sticking with a winning strategy when i found one. I would trade it for a little while and then when i didnt magically triple my portfolio i would move on to the next one... and the next one... so on and so on.
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...
One of the main reason is lacking knowledge about Forex trading and second best one is covering first lose.
Quoting MapleLeaf
{quote} You cannot predict the Future. All indicators LAG big time. FOREX is pure randomness. When you think that you won a trade, because of a James16 candle, it actually was pure randomness, and next time you can lose. The FACT is that 99.6% of people lose long term. All said.
You become what you think about half empty. All you seem to say is that 99.6% of people are losers blah blah blah and we all know that indicators are lagging. There are successful traders out there who use trend lines and specific price action patterns and yes, we will all lose at some stage but it's the amount you win when you win and the amount you lose when you lose that counts. Have you ever thought that some people do make a living from trading. I understand that it takes years and lots of money to get there. A group of people can be shown the same strategy and some will make money and some won't. Why is that ? It's because we need to find our niche, our own strategy that fits in with our personality, risk and lifestyle. I'm not giving up any time soon because believe it or not, I actually like trading. The main attribute is PERSISTENCE and believing in yourself and of course a good mentor.
I think another reason that newer traders lose is due to the lack of discipline that is necessary to trade successfully. This is usually something that is developed over time through practice and persistence. They also don't understand when they don't have an edge and they make the mistake of using too much size (aka leverage) in their trades during this period of time which results in a significant loss of capital that is too large for them to make back. The key is surviving your first two years without getting hit out of the game. Once you have survived that long you start to become profitable if you haven't already by that time period. Always focus on risk/reward ratio, know what you'll lose if you take the trade and it goes against you and keep a record of what is working and what is not working because markets change and it will help you figure out a solid game plan that changes with the market.
Quoting Mingary
{quote} Because preaching to the choir is boring... Someone who can think for himself is a rare individual in this world. All belief systems are self referential.
Sorry for the late reply but been busy scoring pips for the last few days..
I know that we would never agree on the issue but that said, the last line regarding beliefs being self referential did get me laughing out loud..
Thanks for that and FYI, that line would just be perfect for election campaigns depending on which species one votes for, whether it is the donkey or the elephant..
Quoting Forexnuts
{quote} Sorry for the late reply but been busy scoring pips for the last few days.. I know that we would never agree on the issue but that said, the last line regarding beliefs being self referential did get me laughing out loud.. Thanks for that and FYI, that line would just be perfect for election campaigns depending on which species one votes for, whether it is the donkey or the elephant..
True ain't it? It applies to any "body of knowledge" including trading.

I forgot to add...

All belief systems are self-referential.
Including this one.
Quoting Mingary
{quote} True ain't it? It applies to any "body of knowledge" including trading. I forgot to add... All belief systems are self-referential. Including this one.
LOL, that's for damn sure but at least, with trading, we get the same op-eds on the "holy grail requiems" and I dunno what self referential these traders were using, for creating those damn threads in the first place but we, as a whole, sure could have done without the "rinse, repeat, recycle" grail-a-thorns..
I'm a a newbie...I didn't start trading yet, just lurking the forums...
To me the main reason is because may traders are trying to find the holy grail... instead of understand why the price is moving they want a systems that predicts future...
Also the lack of a clear path to follow would discourage the beginners... there are so many systems, so many shady mentors and no one, that is telling what is really important:

Why are you enter a trade?

Basic answers are:
- because indicators (LOL) told me this
- because I feel it
- because I have a proven system

Well... this aren't the asnwers, or at least they aren't the real answers...
If you are going to trade you have to understand why price works IMO
Quoting 4StarGen
I'm a a newbie...I didn't start trading yet, just lurking the forums... To me the main reason is because may traders are trying to find the holy grail... instead of understand why the price is moving they want a systems that predicts future... Also the lack of a clear path to follow would discourage the beginners... there are so many systems, so many shady mentors and no one, that is telling what is really important: Why are you enter a trade? Basic answers are: - because indicators (LOL) told me this - because I feel it - because I have a proven...
Just to clarify what I might have told you earlier, be careful to differentiate "why" from "how". How is actually what's more important here, not why. Why is trying to decipher fundamentals...a futile task from which you'll find a million different opinions from academics and market personalities and common folk alike. How, on the other hand, is such an easier question to work towards solving and is much more practical. How can tell you where to enter and exit. Why can't. It may seem like an obscure, abstract thing to point out but believe me when I say it's important.
Over confidence and impatience are large players in the failure of beginners.
Here are some reasons traders loss money:
Lack of Experience.
Lack of Discipline.
Failure to Include Stop-Loss and Take Profit Instructions.
Excessive Leverage
Greed: thinking about the big win more than Effective cash.
Impatient.
inability to control emotion.
Newbie loose due to the lack of learning and trading experience . they can recover these lacks if they pay attention to it. Old ones loose because they are not serious with trading they see it as game where some times they win and loose. Proper way of trading with patience is great tip for success.
Quoting blesssing23
Here are some reasons traders loss money: Lack of Experience. Lack of Discipline. Failure to Include Stop-Loss and Take Profit Instructions. Excessive Leverage Greed: thinking about the big win more than Effective cash. Impatient. inability to control emotion.
I agree totally with these reasons.. I'm a newbie, and I'd like to share my experience Unless you are a really fast learner, I think IMPATIENCE will get the better of you... Because I was learning and learning and then trying demo again and again.. and after a while I'm like.. For God's sake will I ever set up the right trade..oh,well f**k it, I'm gonna go for it... couple of hours later, I'm broke Now, I'd say this is because of the fact that it's just too early for me and I still need a lot of learning.. I wouldn't say I'm a bad trader, it's just that I'm NO trader yet
i think the main reason why newbi always lose is because they still have not enough experience, they just newly start they still trying to understand about analysis or anything else, so i think its okay if newbie always face lose at their start.
Most of the new traders lose their money in forex market because of their low knowledge and experience. They can not make plans to trade and loss their money.
Discipline, knowledge, because they're gullible enough to believe the promises of scammers, the reasons are many.
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