Why do people lose money on the market?

[SOCRATES]

I knock off early last night in order to ponder this "root". After much thinking an answer I have found.

It would seem that this is an exercise to illustrate how the masses are so willing to chase after secret formulas. The thoughts of easy wealth by knowing a “secret” alone creates the masses to descend swarm like around he who says he posses such information.

Those who can create such a swarming frenzy do indeed posses one thing that the masses are either to lazy or incapable of possessing – and that is nothing more than an insight into human behaviour. It is insight alone that gives us patience, power, and ultimately success. Only when we have insight, and stop chasing “secrets” can we become truly successful.

Correct. Well done !

There is no secret as such.

It is a matter of tuning and alignment and not of discord and contradiction, in order to be able to read and interpret the mind of the market and not have opinions as to what should happen and when and for what reason or reasons.

 

[jm99]

Socrates.....(i may be well wide of the mark here) are u involved with the Seykota trading tribe?

 

[Market Wizard]

Why do people lose money in the markets ?

The inability to deal with the unknown and unfolding events that the market exposes them to.

 

[SOCRATES]

Socrates.....(i may be well wide of the mark here) are u involved with the Seykota trading tribe?

No. not at all.

But Ed is a very experienced trader so he may say similar thngs, is that it ?

....There you go then.

 

[in2uxs]

Why do people lose money in the markets ?

The inability to deal with the unknown and unfolding events that the market exposes them to.

Ability/inability is part of success/non success. Ability is one of the component parts of success, but not the root, no.

So, what is the root? :|

 

[TWI]

So, what is the root?

It is something you can crush up and make tea with.

 

[Legion]

The typical human condition, what I aim to do is bring a child up and give them a bollocking for being right and reward them when wrong. yet install always a sense of knowing humbrance (new word) .

double hum, yet current youth seems to be enjoying those conditions now.... hang on is that a cunning master plan already en route?

that may explain this countries plight about fearing to go on the streets because of the ASBO mobs. or is that media spin , Ive not personally been given the bird whilst out, but hear tales of such goings on locally, adults beginning to lay into kids for being oiks.....

Swing away. Adults This time its personal we must make the streets o.k. again

as for the Root cause of that... well Ive pinned it to the removal of this from our screens. no joke, ok so it apparently can still be seen at some unearthly hour sat morns for 15 mins but thats not good, bring that back at midnight maybe we turn things around....

 

[ampro]

This is all getting a bit deep which is possibly the primary issue for most people.
It's a numbers game, there are no crystal ball predictions there are only probabilities.

Couldn't agree more.

Greed is often the pre-cursor to most losses, (for both experienced & noobs), that + lack of discipline & over complication.

The new entrant (retailers) especially, has a tendancy to dive in with no clear or detailed plan, insufficient capital for their aims & expectations & a lack of appreciation regards leverage (well, certainly in the FX arena anyway). "Champagne taste, lemonade pocket" springs to mind.

Overtrading on timeframes way too inappropriate for their ability or experience & drowning in a sea of indicators which they neither understand or will ever really need.

Education (or a total lack of it) is the root I guess. And impatience, in attempting to run before they can walk - blowing accounts left & right in a futile & misguided assumption that gaining 'live screen time' with a few thousand $$'s will somehow attract a honed & developed appreciation of price action & it's benefits?!

You also hear the comment "play with money you can afford to lose" bandied around quite often. What's that all about? I've yet to encounter anyone (including pro's) who would meekly & happily shovel a pocketful of dough into a trading account under the pretext it's an 'education fee' - education for what exactly? The only education that particular waste of money attracts is the fact you were dumb enough to enter a business without first exploring & unearthing a sensible training period.

Folks seem to lose all common sense where trading is concerned. Would you dump $5 or 10k into a franchise operation before first determining whether or not that business was a suitable route to future financial improvement? Would a pre-qualified doctor set up his/her practice, attract patients & then decide to study for their medical registration-certificates? I don't think so.

If trading is so attractive & compelling, spend the $5k on getting some kind of initial/basic education first (mentoring), & gradually dip your toe. If it still burns bright, then come to the market at least part-way armed.

 

[dbphoenix]

Couldn't agree more.

Greed is often the pre-cursor to most losses, (for both experienced & noobs), that + lack of discipline & over complication.

The new entrant (retailers) especially, has a tendancy to dive in with no clear or detailed plan, insufficient capital for their aims & expectations & a lack of appreciation regards leverage (well, certainly in the FX arena anyway). "Champagne taste, lemonade pocket" springs to mind.

Overtrading on timeframes way too inappropriate for their ability or experience & drowning in a sea of indicators which they neither understand or will ever really need.

Education (or a total lack of it) is the root I guess. And impatience, in attempting to run before they can walk - blowing accounts left & right in a futile & misguided assumption that gaining 'live screen time' with a few thousand $$'s will somehow attract a honed & developed appreciation of price action & it's benefits?!

You also hear the comment "play with money you can afford to lose" bandied around quite often. What's that all about? I've yet to encounter anyone (including pro's) who would meekly & happily shovel a pocketful of dough into a trading account under the pretext it's an 'education fee' - education for what exactly? The only education that particular waste of money attracts is the fact you were dumb enough to enter a business without first exploring & unearthing a sensible training period.

Folks seem to lose all common sense where trading is concerned. Would you dump $5 or 10k into a franchise operation before first determining whether or not that business was a suitable route to future financial improvement? Would a pre-qualified doctor set up his/her practice, attract patients & then decide to study for their medical registration-certificates? I don't think so.

If trading is so attractive & compelling, spend the $5k on getting some kind of initial/basic education first (mentoring), & gradually dip your toe. If it still burns bright, then come to the market at least part-way armed.

Excellent post, ampro. But since it takes far less effort to debate philosophical piffle than it does to do the work, I don't see any of this changing at any time in the foreseeable future.

Db

 

[in2uxs]

"The receptive powers of the masses are very restricted, and their understanding is feeble"

- Mein Kampf by Adolf Hitler - Vol 1 chapter 6

 

[ampro]

Unfortunately, I feel that's probably the case DBP.

A constant requirement for focus & application, although paramount to ongoing (trading) success, often appear in short supply.

If there exists the slightest opportunity to complicate something which screams simplicity, some folks will grab it & thrash it to it's limits

But, there ya go - just makes it a little easier for those who 'stick to their regime' regardless

 

[Legion]

"Excellent post, ampro. But since it takes far less effort to debate philosophical piffle than it does to do the work, I don't see any of this changing at any time in the foreseeable future."


hmm although I guess it can be likened to an experiement sit Homo upright in a chair in front of screen with flashing signs a fist fall of dollars and let him begin.

Just what can man achieve ? as good a result or better than some who have ambitions of using reason,logic, planning ,testing? Great men with those attributes of soundness? continue to be actively engaged and watch their fellow men starve and kill each other . how can those qualities be of any use ?


We cant bang on for conventional education not the state humanities in.

What pratt invented the geneva convention? ok harry see you can blow my head off if we ech point one these chappies , yet I throw mine down wave a whitey, then you treat me to tea and bikkies old boy....

"The worlds problems come about by people not talking" Step Hen Hawkins.

They may as well call em a degree in how to get one over your fellow man . and they call them educated huh ?

dont get selective on me now, its flawed, too many deaths and killings (including those by inaction) to warrant current education systems are a good thing.

nope deeper still, i think.... yet the money men wont like the solutions...

 

[jm99]

No. not at all.

But Ed is a very experienced trader so he may say similar thngs, is that it ?

.

yeah, cos u get it and are coming at things from the same angle. http://www.seykota.com/tribe/

....There you go then.:

watch that ego now :cheesy:

 

[SOCRATES]

.

yeah, cos u get it and are coming at things from the same angle. http://www.seykota.com/tribe/



watch that ego now :cheesy:

Yes, because you either get it or don't get it. Ego doesn't come into it. Ego is the factor blamed by those who don't get it against those who have got it, but it is wrong, because ironically, in order to get it you have to abandon ego. So the message is not understood, and because it is not understood, or indeed accepted, it is easier to shoot the messenger as a sort of knee jerk reaction rather than to deeply and intensely introspect. I will look at the link later, when I have time.:cheesy:

 

[SOCRATES]

Actually, I am beginning to warm to the idea it is best to go with the flow of what people generally percieve regardless of how they succeed in misdirecting themselves than to try to rectify what is ingrained belief.

 

[Dackster]

Why do people lose money on the market? It's due to the process of cannonballing.

 

[peto]

Why do people lose money on the market? It's due to the process of cannonballing.

Thanks Dackster, I don't doubt it. Ive looked up cannonballing just to be sure ( http://www.urbandictionary.com/define.php?term=cannonballing ) and wondered if you'd confirm that if you were referring to the process of farting on an imperious seat causing one's gonads to jump forwards, or the rapid consumption of alcohol whilst smoking weed, both of which I am certain would contribute to me losing money on the market.

 

[Dackster]

It's an irony that most people don't need to go to the extreme lengths of rapidly consuming alchohol whilst smoking weed to lose money,...most do it sober as a judge.

 

[rols]

It's an irony that most people don't need to go to the extreme lengths of rapidly consuming alchohol whilst smoking weed to lose money,...most do it sober as a judge.

How do you know that? Have you got a access to a spy satellite or do you just know everything?

 

[dc2000]

Why do people lose money on the market?

Simple people come to the market with the wrong impression of what trading is all about

You first have to ask yourself, why do funds increasingly rely on tech, neural nets, etc?