Why 95% Of All Traders Fail

I think the first problem is because of lack of balancing between art and logic attitude towards trading. Think like a business, it needs relevant attitude. However what most people do for their first few trade? Open a position and get a profit. After the first profit, he gets sucked by looking for this profit again and again, being so overloaded by this emotion which doesn't allow him to find good trades, and even if he finds good trades - he can't stand closing it. This is psychology. Who were businessmen, they know about this state of one's.
Second reason is that they lack good mentor or coach, because of lack of those. Therefore, no good education and result is evident.

A lot of traders don't start with enough money to start trading like starting with $100. You need a decent balance like $5000 as a minimum. Most traders have to high leverage like 400:1 when they start and blow up there account. Change your leverage to 25:1 or even 10:1 and don't use all your leverage. When you start trading use .01 lots and don't stress if people laugh because you made $5 today if your patient it will grow. A lot of people trade out of desperation like want to have money in a week or two to pay their bills. You need to have some source of income so that your not dependent on your trading money. Expect to take years before you start withdrawing money. A lot of people have unrealistic expectations like making a million out of 500 dollars in a year. Im sure plenty of people have made a million out of trading but im assuming it would take 5 to 10 years which just may be to boring for some people.

People could be losing because there are almost as many different methods to trade as there are traders. Nearly everyone has their own unique edge. How would that affect results?

1. If your edge is prone to mistakes, then you get caught into a continuous process improvement loop, always looking for something to increase your edge's probability.
2. Since no one else is using your edge, BUT YOU, then you have to rely on someone to enter the market AFTER you, in the same direction. Since they are all using their own edge, you really have no idea if that will happen. Somehow you forget that though, so when the trade goes against you, you begin to doubt your edge. Since YOU made the edge, you then begin to doubt yourself.
3. If your edge works, but you spent all your time creating the edge, and not the exit, then you find yourself balancing emotion vs logic as to determining when to exit, and possibly guilt afterwards for poor exit choices.

The winning traders are the ones who ride out correct guesses and close wrong guesses. Anyone can find an entry edge, but to win, you need an exit edge. It is much more important. If you don't know when to take profit, or when to close a loser, you will either have a hard time making money, or have a hard time dealing with self-doubt. As for me, I converted practical business analysis to the markets and made my entry/exit the same value. I concentrate on consistency, not pips. I do not need to know a top or bottom. It does not matter for me. I prefer to use probability based on market sample sizes, and not guesses on a line with a sample size of 1. Also, mathematically, lot size makes more money than pips won. If you know you are likely to win the trade, you can trade large lot sizes. If I make $100 a pip, and you are trading for $1 a pip, then you need to make 100 pips to account for each of mine. Which sounds like an easier path to wealth?

Concentrate on creating good exits, and then trust them.

I fully disagree. This is an especially awful combination..... a sect like teaching structure that mixes up religion and forex trading. And I thought it couldn't get worse with forex marketing..... now this is an example it can.

If the "professional" trader dove_alliance makes statements like - It does not matter for me. I prefer to use probability based on market sample sizes, and not guesses on a line with a sample size of 1. Also, mathematically, lot size makes more money than pips won. If you know you are likely to win the trade, you can trade large lot sizes. If I make $100 a pip, and you are trading for $1 a pip, then you need to make 100 pips to account for each of mine. Which sounds like an easier path to wealth?

Beside the fact that this statement is nonesense, the question at the end should better be: Which sounds like an easier path to blowing your account faster than the speed of light?

But from an ironic point of view the advice isn't that bad....because it is better to blow your account fast and therefore save the most valuable thing in your life - Time -, which then can be dedicated to much more reasonable things like a real productive job.

The bigest mistake they do is they dont take losses, they see the market going against them but are reluctant to take the loss and continue to the next setup. I know its tough, its against human nature, and this is the first and most important step to be taken in order to succeed

Fair enough.

[EDIT] Just noticed that the original exchange was 4.5 years ago. A lot of water has traveled under the bridge since then.

Too many people in it for greed and money - want to get rich quick/fast and don't want to put in the time, dedication and work required to be successful.

Same as really anything you want to do in life really...if you don't try (and try hard), you'll suck at it.

indeed greed in the trade must be fairly identical to the name of human nature, so we can not avoid, then from that greed can not be avoided, but we can minimize order not to endanger account

Dear hanover .... you see meta plugin surely used for slip/candle make/history ,...
I dont have trust Meta honestly! ... I think broker can see your indicator/EA code !
I asked some where and said no. what do you think about in?
In addittion ctrader says we never allow broker do anything .... agree ?

I believe that plugins do exist, and that some br0kers use them. However, I've run small accounts with Australian br0kers Pepperstone and AxiTrader intermittently for 7-8 years now, and to be fair, I have no evidence to suspect that either has ever cheated me. I've had price get within a fraction of a pip of my SL, but have never been taken out unfairly, at least on the orders that I've monitored manually (nowadays, many of my exits are managed by EAs). I believe that my trading losses are largely the result of my inability to 'read' the market correctly all of the time.

My EAs and indicators are very valuable to me, but I very much doubt that br0kers would be interested in their source code (MQ4 files). If you're worried about this, move your MQ4 files onto off-line storage. The EX4 files are compiled code that stays on your computer (i.e. a br0ker would need to raid your computer to access them). Unless you're making millions of dollars it wouldn't be worth the br0ker's effort to try to steal and reverse engineer them; in any case, there are simpler and better ways for him to profit. In my experience, virtually all of the helpdesk staff employed by br0kers know very little about programming, let alone being knowledgeable enough to reverse engineer an EX4. So, no offense, but IMHO anybody who is worried about their intellectual property being stolen by a br0ker is naively paranoid.

Put your focus into finding a robust edge -- I have found that to be the most difficult part -- your br0ker should be the least of your worries.

I have never used cTrader, hence I can't comment. But if you distrust MT4, then cTrader might be worth a try. No doubt there's plenty of info and reviews that can be located using Google.

The lesson of the day:

Know when not to trade!!!!!!! and most important: Don't trade then.

Today I saw, that the market isn't the best for my strategy, but I forced trade. Big mistake.

Ha, that’s a good point. Trading impulsively even though you know it’s a bad idea never leads to anything good.

They loose because they take wrong side of market and keep holding it

Good day to all that read this.
I need help from anyone. I have been trading for, and looking at charts, 4 years now, and every time I try to trade and come out with a profit, I fail, miserably. I am becoming more depressed than I already am without trading. I am financially struggling and I am tired of being a peasant; I am tired of working for someone else and being bossed around like I am some type of animal who can be replaceable in a moments notice. Please, I need help. I am pleading. I need a mentor that can guide me and show me all my mistakes and teach me things in a way that I could not have had thought of myself. My personality is not the type that likes to ask for help, and I am a sore loser. My doing this takes a lot and means I am at an extreme low in my life. Please, if someone reads this and they can mentor me and help me become better, I will be greatful for your help till the day I die. Please private message me and we can exchange numbers or meet up on skype. I desperatly needs someones help :/.

Yours grateful, Noor

Daanman , I believe that your post is the most correct for new traders like myself. New traders hang on to their losing trades way too long and do not allow their profitable trades to finish. Thank you for your honesty.

Can anyone tell me what an EA is. Many posts that I have read have this acronym in them. I don't believe that it means exponential average. Thanking you in advance.

EA stands for Expert Advisor - automated trading program in MetaTrader platform.

For a trader with patience, discipline, and courage, there are thousands of profitable techniques / setups.
For a trader missing even one of these, there are none.

Thank you for the answer.

Why Most Traders Fail?

One of the things to consider is to realise that trading like any business has a range of products (trading strategies) that have a lifecycle that span the period where market conditions are favourable or when your system is capable of exploting alpha opportunities.

Market conditions are dynamic and any arbitrage opportunities that may temporarily exist in efficient markets is quickly exploited. For example, you conduct a backtest over the past 10 years or so and find that a particular trading strategy displayed strong performance during this period. You therefore assume that this long history is sufficient to suggest that this particular strategy has a demonsrated edge.

Meanwhile in backtest land......... others are also coming to the same conclusion as you.

As a result, you progressively find that what was present as an opportunity in the past no longer exists as the pirahnas come to feast on the alpha spoils and lo and behold it disappears before your eyes. The impact of this competition eats the opportunity and as a result, the participant interactions on available available alpha alters market conditions.....

......and then you are left scratching your head wondering where did that opportunity go? Why doesn't my actual trading now reflect the performance of my backtest?.......is the market watching my every move?.....this friggin strategy is killing me.......this is a mugs game.....I am just a gambler........I want my mummy!!!!!

Ok before we start throwing a tantrum, compare this to a retail business. Guess what?...... one of your product lines is no longer the cash cow for the business,.....welcome to the world of any competetive market, take a deep breath and suck it in. How you overcome this common ailment to any business is to diversify your product line and continually improve it to keep your trading edge in this game.

Trading is about how effective you are at keeping ahead of the competetion (other participants). You may be the very lucky handful that have a very robust strategy capable of riding market uncertainty (the signature product line like the Akubra hat)....but in general you need to be able to quickly adapt to keep your business afloat. A discretionary trader might be able to adapt without actually being congnisant of it, however a fully systematic trader needs to have a strategy factory and keep pumping out new strategies that respond to recent market conditions........ and you need to be able to rotate your product lines and know when to turn off a product line and replace it with a new one. It does not mean that you throw that strategy in the bin, it just means that you turn it off and put it back into demo mode while continuing to track it's performance and when called for, resurrect it back into the product line.

C'mon guys, smell the competetion and start thinking of trading as a business. Leave the art to the Picasso's out there and start delivering to your shareholders before they or you pull your capital from this market.

Make sure you are not left holding all your stock where you finally have to take a very large hit and manage your inventory diligently. Recognise that in a complex competetive market, one participants success is going to be quickly copied by the competition and as a long term prospect, you cannot rest on your laurels and assume that a single product is going to bring home your bacon. Diversify or die!!!!