Why do so many traders lose money?

This is a discussion on Why do so many traders lose money? within the General Trading Chat forums, part of the T2W Archive category; Originally Posted by Captain Currency What would be the saying for trading??? These days, over here, there are more and ...

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Old Aug 6, 2009, 6:23pm   #64
 
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Originally Posted by Captain Currency View Post
What would be the saying for trading???
These days, over here, there are more and more ads and commercials trying to sell trading accounts like if it where mobiles, clothes or cars.

All you need is a couple of bucks and a mouse to click
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Money is just a consequence.
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Old Aug 6, 2009, 6:55pm   #65
Joined Jul 2009
i should know the answer to this question, as i've just came out of a 6 month long holy-grail chase.
And now i aml comfortable with daily time frames, and i tried intraday cause it sounded cool and boy o boy did i suck!
it all boiled down to one thing-impatience

edit: o yeh and trying to master a market which doesn't suit you. To be honest it's probably better to focus on a number of markets
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Old Aug 6, 2009, 6:58pm   #66
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Originally Posted by meanreversion View Post
Some good feedback here, but I'm still trying to boil it down to the simplest denominator. As an example, I often speak to traders who tell me that moving the stop to breakeven is the most important thing to do (once the rate has moved far enough in your favour), because then it's a "free bet". Also, if the trade is a long way in your favour, then start ratcheting the stop up (trailing stop loss). These two approaches sound perfectly logical, reasonable etc.

BUT I've done a fair bit of testing on this, and frankly the best method is to leave your stop loss and take profit alone..... tinkering ruins performance of the strategy because there will be times when you get stopped for breakeven, only for the rate to reverse and go back again.

So I'm starting to wonder if trading is difficult because of the simple reason that everything which is INTUITIVE is wrong, i.e. humans are not NATURAL traders, they have to learn it.

Golf would be a good analogy here.. much of the swing is counter-intuitive. Want the ball to move right? Aim left and watch it slice. Want to hit the ball hard? Swing as fast as you possibly can and (most likely) duff it 20 yards. Golf requires years of practice and training, and the vast majority of people who play it are simply not very good.

"moving the stop to breakeven is the most important thing to do (once the rate has moved far enough in your favour), because then it's a "free bet"."

There are no free lunches in trading.
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Old Aug 6, 2009, 7:04pm   #67
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Originally Posted by mrsoul View Post
"moving the stop to breakeven is the most important thing to do (once the rate has moved far enough in your favour), because then it's a "free bet"."


There are no free lunches in trading.
Please elaborate
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Old Aug 6, 2009, 7:05pm   #68
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Originally Posted by robster970 View Post
...............and yesterday afternoon E-Mini session was mine.

I managed to not blow my account nor eat into my initial capital, but I did quite successfully manage to blow away the entire of last months profits in the space of 2.5hrs.

I sat there last night having a beer and tried to dissect why it had happened. The main reasons are as follows:

- I ignored my own risk management rules which inflated the extent of my losses, even though my stop losses were not tinkered with. Keeping the stops in place and not tinkering with them was my only saving grace.

- I was not focussed whilst trading. I had not tuned into the mood of the market before I started the session. I did not do my usual prep of checking news, looking at the morning session behaviour and going through charts from higher to lower timeframes to arrive at my trading context for the session.

- I ignored my usual set-ups and impulse traded on techniques that I know do not suit me or my personality (I am a lousy swing trader but good with breakouts/fake-outs). I have empirical evidence from demo trading to show I am rubbish at them, so god knows why I chose to execute in such a way.

- I ignored the fact that I was tired and was not mentally prepared for the session.

- I got emotional and revenge traded 3 of the 6 trades. The other 3 trades I just got wrong in terms of volatility stopping me out and drawing trend-lines in the wrong place (I run really tight stops but can afford to do so most of the time because my S+R line placement on 5m charts is good enough to run tight stops within the current volatility context).

I don't think there is ever one reason why people lose but what hit home to me last night is that you only need 1 aspect of your trading methodology to be wrong in order for the market to take you to the cleaners.

So the moral of the story in a really boy-scout way is always be prepared and disciplined.

As Ray Liotta in 'Goodfellas' said, "Every now and again, you have to take a beating".

It's whether you get back on the horse and learn that makes the difference.
Great post robster.

If you don't stick to your plan, you are going to take a beating.
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Old Aug 6, 2009, 7:47pm   #69
 
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Originally Posted by cuotes View Post
These days, over here, there are more and more ads and commercials trying to sell trading accounts like if it where mobiles, clothes or cars.

All you need is a couple of bucks and a mouse to click
Hahaha..
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Old Aug 6, 2009, 7:50pm   #70
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Originally Posted by mrsoul View Post
"moving the stop to breakeven is the most important thing to do (once the rate has moved far enough in your favour), because then it's a "free bet"."

There are no free lunches in trading.

Based on my very limited experience, the hard part about this is determining what constitutes "far enough".
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