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Most traders fail because of no discipline!

  • #41
  • Jan 21, 2017 4:56pm Jan 21, 2017 4:56pm
Quoting TooSlow
{quote} By all means, please elaborate.
When opening a new stop order or closing a market loser (at SL), in both cases, the "faster" of both prices gets there FIRST.

When closing a profitable trade, the "slower" price has to get to the level SECOND.

This shows the exact nature of forex. Does not look to me, it is build to make you rich...

Focus on the exit plans. This solves all other issues discussed here. At a glance.

Where you enter matters, but how you exit a situation, is far more important.

The psychological problems, while trading, arise from not having a good exit plan(s). Don't you get it?

Having a SL hit is the best "exit" plan you all come up to?. Do you drive a car the same way, when not on the right road, I wonder? How do you handle being on the wrong road? Drive the car to a full stop? Give it all up? Fuck it! I am leaving the car here! I am on the wrong fucking road! I will try to drive MY CAR, some other time... at some better road(s)?!?!?! Hello???
Maadik Hugiis. IQ 69.
  • #42
  • Jan 21, 2017 5:10pm Jan 21, 2017 5:10pm
Quoting alphaomega
Over 99% of all mechanical systems with rigid repeatable rules tend to produce trade expectancy = 0 (before cost) Only a few systems produce very small deviations (positive or negative). In most cases the deviation is Insufficient to cover the transaction cost. It doesn't matter what the system is. You can come up with any combination of indicators, patterns..rules......whatever......the result is the same! The end conclusion is that, rigid rules purely based on technicals = ZERO edge in 99,99999% of the cases
Which suggests to me that, while recurring broadbrush phenomena (e.g. accumulation, distribution, profit taking, trapped traders, stop hunts, bull/bear traps, supply/demand imbalances, etc) occur -- most of which is obvious enough in hindsight(!) -- they don't produce mathematically definable chart patterns that are consistent enough for a mechanical system to nail down, and anticipate in real time. Or, more simply, mechanical systems lack the intelligence to recognize and exploit whatever non-randomness exists in price movement.
  • #43
  • Jan 21, 2017 6:37pm Jan 21, 2017 6:37pm
Actually, rigid rules are the kiss of death in trading. If the market was in the same state all the time rigid rules would always work. As an experienced trader knowing when you can trade and apply your rules is key. Knowing when to sit back and stay out of a trade is something only a AI system could do.

However, the market does function according to rules. But, reading the actual price move and knowing when it will respect those rules is the key to trading consistency.
  • #44
  • Edited 7:16pm Jan 21, 2017 6:37pm | Edited 7:16pm
I agree mostly with what alphaomega and hanover wrote, this lack of positive edge with the method to overcome cost is the main reason why most traders lose in this game. Psychology factors come in second.

Having said that, I have to propose that mathematically definable patterns do exist on our charts for mechanical systems to exploit in real time. But the base concept is not the typical stuff you read on forums, youtube or even books.

The problem is most traders 'educate' themselves reading the stuff from these sources and their minds become rigidly biased. As a result a deep belief of how this random financial markets operate is entrenched. They remain stuck with this unshakable belief and do not spend enough time to think how to solve the puzzle.

I strongly suggest to put a stop to the typical learning process, revert your time to think about this price randomness as a mathematical puzzle to come up with a solution with a positive edge. The day you see that positive edge from a different conceptual perspective to the market on your chart you will want more of it. The main hurdle is the issue with causality where people being logical by nature we need it to flow in accordance with mainstream science and maths concepts, that's where the challenge lies. Maintain a very wide open and unbiased mind in this think, search for solution process. I suggest to look at other random distributions besides price movement at the same time as comparison, you might see this central conceptual theme that exits on all these distributions.
  • #45
  • Jan 21, 2017 6:50pm Jan 21, 2017 6:50pm
Quoting skyway
I agree mostly with what alphaomega and hanover wrote, this lack of positive edge with the method to overcome cost is the main reason why most traders lose in this game. Having said that, I have to propose that mathematically definable patterns do exist on our charts for mechanical systems to exploit in real time. But the base concept is not the typical stuff you read on forums, youtube or even books. The problem is most traders 'educate' themselves reading the stuff from these sources and this results in their minds become rigidly bias. As a result...
Totally agree to this approach, sitting down with a calculator an open mind and actually looking at price moves on your chart will open your understanding of price movement. Far from being random, price has a job to do. Fill orders, price is only looking to match orders. If it takes out yesterdays high then reverses, what does that actually mean? How much does it stray from its average mean value, before returning? Are you ranging or trending historically. Why is the market you are trading ranging what does a range actually mean. What doe the market do once it finishes ranging. These simple questions will open up your ability as a trader.

Lastly, try to understand what rules govern price movement, it is not random. Price obeys rules, it is your job to find out what they are.
  • #46
  • Jan 21, 2017 7:24pm Jan 21, 2017 7:24pm
Quoting pulke
{quote} Ronda- you should tell us about dicipline! you are an ulympian and were the ufc champion!
Ronda showed that a woman can make more money in MMA than a man and become a multi millionaire. Respect for her.
You came here for the truth and let me unveil it for you
  • #47
  • Jan 21, 2017 7:24pm Jan 21, 2017 7:24pm
Most traders fail because they buy when they should sell and sell when they should buy.
The greatest enemy of a good plan is the dream of a perfect plan.
  • #48
  • Jan 21, 2017 7:54pm Jan 21, 2017 7:54pm
Quoting skyway
I agree mostly with what alphaomega and hanover wrote, this lack of positive edge with the method to overcome cost is the main reason why most traders lose in this game. Psychology factors come in second. Having said that, I have to propose that mathematically definable patterns do exist on our charts for mechanical systems to exploit in real time. But the base concept is not the typical stuff you read on forums, youtube or even books. The problem is most traders 'educate' themselves reading the stuff from these sources and their minds become rigidly...
I agree. You need to find an edge that is so great that it can outweigh transactions costs, slippage, human error, news events or anything else that can prevent you from making a positive return. This is the golden goose. Seek it because it's worth it. Don't use an approach that only has a minor edge. The bigger the margin of safety the better.
You came here for the truth and let me unveil it for you
  • #49
  • Jan 21, 2017 8:33pm Jan 21, 2017 8:33pm
Quoting hanover
{quote} Which suggests to me that, while recurring broadbrush phenomena (e.g. accumulation, distribution, profit taking, trapped traders, stop hunts, bull/bear traps, supply/demand imbalances, etc) occur -- most of which is obvious enough in hindsight(!) -- they don't produce mathematically definable chart patterns that are consistent enough for a mechanical system to nail down, and anticipate in real time. Or, more simply, mechanical systems lack the intelligence to recognize and exploit whatever non-randomness exists in price movement.
EXACTLY! This is why the discretionary trading is my primary choice.
I've been trying to automate my discretionary methods for years, but without success.

The main problem is that much of the things which I do, rely on external information.
Timing, fundamentals, overall market sentiment, news.... and all of this in combination with technical patterns. Almost impossible to automate.

But even if we take purely technical setups, on the surface they look simple, but when you look more deeply into the data (time series, ticks, volume, ) and all possible variations, you discover that there are some incredible and complicated relationships between price, time and volume. I mean, it takes pretty much "rocket science" level of math understanding and coding in order to describe these patterns with code.....It is certainly way beyond my skill ( and i guess the skill of 99,99% of retail traders.)
There is a reason why quant funds like "Renaissance Technologies" hire real rocket scientist, mathematicians, statisticians, and astronomers. AND keep everything they do in secret.
  • #50
  • Jan 21, 2017 10:04pm Jan 21, 2017 10:04pm
HOLD YOUR HORSES GUYS!!!!

Too many reasons or lists on why Traders Fail.

The #1 Rule to remember when you trade is : "THE MARKET IS ALWAYS RIGHT "

The moment you let that sink in, you put aside your EGO and your desire to be right
about any Direction of the market at any given moment....

The Market does 3 things: It goes UP, It goes DOWN and It goes Sideways.

As a trader, there are 2 things that you can do or learn:

#1. Develop a skill set that's going to help you Identify the Current Market Sentiment/the Overall Market
Direction 60% to 80% at a time on a weekly basis.

#2. Learn how to Master Your Risk Management.
Have an INVESTOR Mindset, but Trade like an ENTREPRENEUR
  • #51
  • Jan 21, 2017 10:24pm Jan 21, 2017 10:24pm
Quoting OctaveJay509
HOLD YOUR HORSES GUYS!!!! Too many reasons or lists on why Traders Fail. The #1 Rule to remember when you trade is : "THE MARKET IS ALWAYS RIGHT " The moment you let that sink in, you put aside your EGO and your desire to be right about any Direction of the market at any given moment.... The Market does 3 things: It goes UP, It goes DOWN and It goes Sideways. As a trader, there are 2 things that you can do or learn: #1. Develop a skill set that's going to help you Identify the Current Market Sentiment/the Overall...
Not exactly.
Price moves up, Price moves down or Price does not move at all.
Sideways "movement" does not exist.
My Threads: Trading is as simple as 1-2-3, Highest Open / Lowest Open Trade
  • #52
  • Jan 21, 2017 11:05pm Jan 21, 2017 11:05pm
Quoting alphaomega
{quote} EXACTLY! This is why the discretionary trading is my primary choice. I've been trying to automate my discretionary methods for years, but without success. The main problem is that much of the things which I do, rely on external information. Timing, fundamentals, overall market sentiment, news.... and all of this in combination with technical patterns. Almost impossible to automate. But even if we take purely technical setups, on the surface they look simple, but when you look more deeply into the data (time series, ticks, volume, ) and all...
LTCM had nobel prize winners in their team and they went broke. They had guys that created the Options pricing models and the market destroyed them. They were very smart guys that did dumb things. To win in the market you don't need to be a rock scientist or an IQ of 200. The future price movements of any currency, commodity and stock is unknown. Therefore, you need an approach that can profit from the unknown. Don't predict just profit.
You came here for the truth and let me unveil it for you
  • #53
  • Jan 21, 2017 11:07pm Jan 21, 2017 11:07pm
Quoting RondaRousey
Ronda showed that a woman can make more money in MMA than a man and become a multi millionaire. Respect for her.
Daryl Guppy also makes millions from MMA.
  • #54
  • Jan 21, 2017 11:32pm Jan 21, 2017 11:32pm
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Learn, a forex trader must, unlearn and relearn he will.
  • #55
  • Jan 22, 2017 12:28am Jan 22, 2017 12:28am
Quoting skyway
I agree mostly with what alphaomega and hanover wrote, this lack of positive edge with the method to overcome cost is the main reason why most traders lose in this game. Psychology factors come in second. Having said that, I have to propose that mathematically definable patterns do exist on our charts for mechanical systems to exploit in real time. But the base concept is not the typical stuff you read on forums, youtube or even books. The problem is most traders 'educate' themselves reading the stuff from these sources and their minds become rigidly...
Positive edge means having a good methodology to use in trading that if the trader religiously implement it every single day he will come out profitable, but because most trader step on the wrong foot at the start he cannot get his act together, it will be too difficult to create winning system if the trader is not having the right mindset.
  • #56
  • Jan 22, 2017 12:39am Jan 22, 2017 12:39am
Quoting edge540
Sorry to let your tyres down "techboy" but your thread should be titled "All traders fail".This is a losers game.
If this is what you believe then you should stop trading you will just keep on losing money, but my belief system is different yeah this is a losers game but it does not mean that all traders will fail, there are a few that build a fortune in trading we just have to figure out how? Peace!
  • #57
  • Jan 22, 2017 12:51am Jan 22, 2017 12:51am
I think everyone knows why traders fail except me. Where are people getting this data that explains why people fail? Is everyone examining hundreds of thousands of accounts, interviewing lots and lots of of traders and then coming up with different reasons? Maybe they are taking a snapshot of forum posts. People are asserting these reasons as if they are cold hard facts when to me they sound like hunches.

Having a lack of discipline, poor money management or a flawed plan is a recipe for disaster but in the absence of any evidence no one can come out and say "Most traders fail because .....". If there are any stats available can someone please post a link.
  • #58
  • Jan 22, 2017 12:59am Jan 22, 2017 12:59am
Quoting alphaomega
{quote} Yep! I have done extensive algo testing and simulations in the past ( a few years ago) just to prove it for myself. And the results confirm what the academics say. Over 99% of all mechanical systems with rigid repeatable rules tend to produce trade expectancy = 0 (before cost) Only a few systems produce very small deviations (positive or negative). In most cases the deviation is Insufficient to cover the transaction cost. It doesn't matter what the system is. You can come up with any combination of indicators, patterns..rules......whatever......the...
Sir, correct me if I am wrong you are implying that a trader cannot be profitable by following a fix mechanical system? so its better to do discretionary trading or some adaptive approach and make random changes of your strategy in a day to day basis? in my humble opinion no specific approach in trading that can really handle well the market all the time it may depend on the particular trader whether he will use mechanical system or discretionary trading as long that we can keep our winners higher than our losers then we still come out profitable. I am not a guru or into some advance scientific approaches but for me trading is a simple Winning Trades - Losing Trades = Profits, if only traders can avoid trading mistakes and maintain good RR and risk control all the time in his trading then he can be profitable but majority of traders just cannot do it, its as simple as that!
  • #59
  • Jan 22, 2017 1:09am Jan 22, 2017 1:09am
Quoting techboy46
{quote} If this is what you believe then you should stop trading you will just keep on losing money, but my belief system is different yeah this is a losers game but it does not mean that all traders will fail, there are a few that build a fortune in trading we just have to figure out how? Peace!
The secret in forex trading is simple first you must understand that all strategies will fail at some point,so my suggestion is that you set a target of where you want to grow your money upto and when you hit your target withdraw all the money and then repeat the process all over again.This way you will improve your chances of beating the 0 trade expectancy.
100% KENYAN.
  • #60
  • Jan 22, 2017 1:44am Jan 22, 2017 1:44am
Quoting techboy46
Discipline , Discipline, Discipline
You absolutely nailed it my brother. Trading is discipline. 200% agree.
Forex; the game of movements not the game of candles.
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