Why are retail traders frequently trapped by the markets? | Forex Factory

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Why are retail traders frequently trapped by the markets?

  • #1
  • First Post: May 15, 2014 4:53pm May 15, 2014 4:53pm
Look at the 'outlook' page on myfxbook. Retail traders as a whole are always losing, whether they are long or short. I think most traders try very hard to learn from their mistakes, but the result never changes. There must be some reasons why this happens again and again.
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  • #2
  • May 15, 2014 8:27pm May 15, 2014 8:27pm
Maybe it's only the retail traders signed-up on myfxbook that are frequently trapped?

Can't speak for the rest of us, but I'm feeling pretty free.
I'm not trying to convince anyone. I'm not in the "convincing" business.
  • #3
  • May 16, 2014 2:11am May 16, 2014 2:11am
You just don't understand.

We the pro already win and tp short. Our position is not long term.

While the loser get stuck on BOTH buy and sell because ...they haven't been able to tp due to sell low and buy high.

If the pro don't have any order holding in the market it will not show up in the "currently buy sell statstic"
  • #4
  • May 16, 2014 2:29am May 16, 2014 2:29am
Traders are never taught or learn how to turn their emotions into data and then make rational decisions.

Trading is all about emotion and the best traders use their emotions to their advantage.

When price surges in one direction (for example) their is an emotion watching it, if you don't rationalize that feeling and act accordingly you will make an instinctive reaction instead of an intuitive one.

A simple written plan can remove most of these errors,but... humans always consider themselves far more intelligent and far more skilled than they ever are, so, they don't write a plan "i know it all already, why write it down!"

These elements of trading are far more likely to make you a winner, but humans want answers instead so they spend all their time on the largely pointless technical analysis techniques.
tradewith60
  • #5
  • May 16, 2014 2:33am May 16, 2014 2:33am
she say's it better than me
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tradewith60
  • #6
  • May 16, 2014 2:38am May 16, 2014 2:38am
If retail traders don't lose, then there would be no one left to win..
All jokes aside.
1) if retail has a profit, they take it (quickly), therefore when they win they are not in the market
2) if retail has a loss, they keep it (until MC), therefore when they lose they are in the market.

Therefore, retail traders as a whole are always losing.
  • #7
  • May 16, 2014 3:23am May 16, 2014 3:23am
That's why people say Is Forex Reliable?
  • #8
  • May 16, 2014 4:41am May 16, 2014 4:41am
Retail traders have some fault. For this they can not profit too much. They earn too little and when they start loss they do not close their order. I don't know what is their tendency! they do not like to see loss in their history. For this when a quot goes high, they make huge loss. Even they loss all the capital. For example if they buy in 1.2053 they will close it in 1.2063 but when it goes 100 pips down they won't close the trade.
  • #9
  • May 16, 2014 8:05am May 16, 2014 8:05am
I have often wondered this too, I don't think the market is rigged, I think retail traders (myself included) just don't understand the market well enough.
  • #10
  • Feb 22, 2015 4:36pm Feb 22, 2015 4:36pm
Quoting victor_ray
You just don't understand. We the pro already win and tp short. Our position is not long term. While the loser get stuck on BOTH buy and sell because ...they haven't been able to tp due to sell low and buy high. If the pro don't have any order holding in the market it will not show up in the "currently buy sell statstic"
After using for about 9 months the selling low and buying high "idea", I am certain that's not an issue (you can check both of my accounts, here). The main problem, in my opinion, is that the most of the traders have not tested a system sufficient time on demo and then trade with real money, only if the strategy is profitable. The second one is that the most of them do not use T/P and S/L, or use too narrow stop-losses and/or too narrow T/P, if used.
  • #11
  • Feb 22, 2015 5:24pm Feb 22, 2015 5:24pm
Quoting diavolul
{quote} After using for about 9 months the selling low and buying high "idea", I am certain that's not an issue (you can check both of my accounts, here). The main problem, in my opinion, is that the most of the traders have not tested a system sufficient time on demo and then trade with real money, only if the strategy is profitable. The second one is that the most of them do not use T/P and S/L, or use too narrow stop-losses and/or too narrow T/P, if used.
System ? That's a mistake in itself right there .

Markets change and so should you .. Biggest mistake retailers play is not identifying the market characteristics and that takes time.
  • #12
  • Feb 22, 2015 5:56pm Feb 22, 2015 5:56pm
Quoting lasty
{quote} System ? That's a mistake in itself right there . Markets change and so should you .. Biggest mistake retailers play is not identifying the market characteristics and that takes time.
My system fit in all currency pairs so it's about having that edge, to automatically avoid trading when the markets are in range, as much as possible.
  • #13
  • Last Post: Feb 22, 2015 6:03pm Feb 22, 2015 6:03pm
They don't cut their losers, the market isn't trapping anyone, they just aren't taking the loss.

thankfully I was never afraid to take my loss, I never liked it, not one bit, but it is the one rule I always stuck to, and it prevented me from anything greater than a 15% drawdown
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