The Real Reason Most Traders Lose- The Real Odds of Winning at Trading:

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mrsoul

Active member
Feb 7, 2009
323
35
38
#1
Hello Fellow Traders,

I'd like to share this thought: The Real Reason Most Traders Lose- The Real Odds of Winning at Trading:

Did you ever wonder why you ALWAYS lose at trading?
Did you ever wonder why just about everyone loses at trading?

The reason for this is because the odds of winning at trading are horrible.

Let me illustrate this:

When you place a trade, there are 2 ways to lose and only 1 way to win.

Here is how you lose:

1) The trade is a loser from the start.
2) The trade is winning from the start but it comes back and then you lose.

Here is how you win:

1) The trade is a winner right out of the box- This is the ONLY way to win.


Therefore, since there are 2 ways to lose and 1 way to win, the odds are 66% that you will lose and 34% that you will win

Bad timing can make these odds even worse!

It is possible to win a bet if the odds are only 34% of winning; however, you are guaranteed to lose all of your money if you keep REPEATING this bet

That is why, in trading, it is always possible to make money but extremely difficult to KEEP the money.

The only way to overcome these odds is to find something that really works well; otherwise you are guaranteed to lose all of your money

Does anyone have a strategy that can overcome these odds?
I'd love to hear because I've been looking, on and off, for over 30 years and have not found one.

Best of Luck

MrSoul
 
Feb 3, 2008
69
12
18
#2
Your maths makes no sense. A 50 point stop and a 50 point target- theoretically you have a 50% chance of winning, if you believe the market is random. But entirely random its not, so you find an edge to tips the odds in your favor.
Here is how you lose:
1) The trade is a loser from the start.
2) The trade is winning from the start but it comes back and then you lose.
These are exactly the same outcomes, so theres not two ways you lose- just one.

I find it hard to believe that you've been involved in the market for 30 yrs and expect someone on this forum to give you a holy grail, surely you know it just doesn't work like that.
 
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0007

Well-known member
Jun 19, 2005
1,978
422
93
#4
Hello Fellow Traders,

I'd like to share this thought: The Real Reason Most Traders Lose- The Real Odds of Winning at Trading:

Did you ever wonder why you ALWAYS lose at trading?
Did you ever wonder why just about everyone loses at trading?

The reason for this is because the odds of winning at trading are horrible.

Let me illustrate this:

When you place a trade, there are 2 ways to lose and only 1 way to win.

Here is how you lose:

1) The trade is a loser from the start.
2) The trade is winning from the start but it comes back and then you lose.

Here is how you win:

1) The trade is a winner right out of the box- This is the ONLY way to win.


Therefore, since there are 2 ways to lose and 1 way to win, the odds are 66% that you will lose and 34% that you will win

Bad timing can make these odds even worse!

It is possible to win a bet if the odds are only 34% of winning; however, you are guaranteed to lose all of your money if you keep REPEATING this bet

That is why, in trading, it is always possible to make money but extremely difficult to KEEP the money.

The only way to overcome these odds is to find something that really works well; otherwise you are guaranteed to lose all of your money

Does anyone have a strategy that can overcome these odds?
I'd love to hear because I've been looking, on and off, for over 30 years and have not found one.

Best of Luck

MrSoul
I think your calulations above are suspect though you have got the right idea in that most traders are (apparently) unprofitable - IMHO this is because they have allowed the odds to be stacked against them; not because they are by some law of the universe.

Succesful trading is all about probability (in your favour). If you have a system with an edge (ie it is overall profitable) and you can get your trading discipline in order, then mathematically you will come out ahead (although almost certainly with some pain on the way). It really is that straightforward.
 
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mrsoul

Active member
Feb 7, 2009
323
35
38
#10
So what if I don't use a stop. What happens to the ways of winning?

The way trading without a stop effects the odds of winning is interesting.

I really don't know how to calculate those odds.

The only thing for sure is that there must be a surrender point somewhere in order to protect the account; perhaps this is accomplished when an indicator tells you to reverse your position.

Best of Luck
 
Feb 3, 2008
69
12
18
#15
perhaps there is an indicator to tell when traders are hostile about losing there money or just hostile in general
im not sure there is one.... i look into it. But seriously you come on here saying you have 30 years of experience and then consider using no stops as a strategy, somebody shoot me.
 

rathcoole_exile

Well-known member
Jun 12, 2007
3,924
765
123
Krung Thep Mahanakhon
#16
Did you ever wonder why you ALWAYS lose at trading?
I SOMETIMES LOSE BUT MOSTLY WIN, BUT AS I WILL DEMONSTRATE LATER, THE WINNING % STRIKE RATE IS HARDLY THE MOST IMPORTANT CRITERIA WHETHER A TRADER IF FINANCIALLY SUCCESSFUL OR NOT

Did you ever wonder why just about everyone loses at trading?
I KNOW SEVERAL PEOPLE, NOT LEAST MEMBERS OF T2W WHO ALSO DO NOT LOSE



When you place a trade, there are 2 ways to lose and only 1 way to win.

INCORRECT, THERE ARE 3 WAYS A TRADE CAN GO, BUT ONLY 1 WINS AND 1 WAY LOSES
THE OTHER WAY IS WHEN PRICE MOVES SIDEWAYS,
BUT EVENTUALLY ONE OF THE OTHER 2 RESULTS MAY OCCUR, UNLESS YOU CLOSE YOUR TRADE BECAUSE OF A TIME-BOUND LIMIT OR YOU LIKE TO CLOSE AT EOD ETC
I'D SAY THAT WOULD BE A FAIRLY NEUTRAL RESULT ?

Here is how you lose:

1) The trade is a loser from the start.
2) The trade is winning from the start but it comes back and then you lose.
THIS IS THE SAME THING. WHEN YOU PLACE YOUR TRADE THE RISK THAT YOU WOULD LOSE WAS THE SAME, WHETHER PRICE WENT ONE WAY FIRST OR NOT

YOU CAN MITIGATE THIS RISK BY MOVING YOUR STOP LOSS OR REDUCING YOUR RISK EXPOSURE if YOUR TRADE STARTS "WINNING"

Here is how you win:

1) The trade is a winner right out of the box- This is the ONLY way to win.
SO YOU NEVER HAVE A TRADE GO AGAINST YOU, TOWARDS YOUR SAFETY STOP AND THEN REVERSE AND MOVE INTO PROFITABILITY ?


Therefore, since there are 2 ways to lose and 1 way to win, the odds are 66% that you will lose and 34% that you will win

INCORRECT. THE ODDS THAT YOU WILL WIN OR LOSE AR 50:50
MONEY MANAGEMENT PLAYS A SIGNIFICANT PART IN HOW YOU TURN THAT 50% WINNING OPPORTUNITY INTO A NET POSITIVE RESULT

Bad timing can make these odds even worse!
NONSENSE. ANY TRADE CAN IMMEDIATELY GO IN ANY OF THE 3 DIRECTIONS MENTIONED ABOVE, THE SPLIT SECOND YOU PLACE YOUR TRADE

It is possible to win a bet if the odds are only 34% of winning; however, you are guaranteed to lose all of your money if you keep REPEATING this bet
BY DEFINITION IF A HORSE IS 2-1 THEN HE HAS A 33% CHANCE OF WINNING. WHY WOULD REPEATING THIS BET GUARANTEE YOU LOSE MONEY ? SURELY THE OUTCOME WOULD BE NEUTRAL OVER TIME ?

TO CLARIFY, IF YOU WIN 33% OF YOUR TRADES AND TAKE A 2 POINT PROFIT EACH TIME, WITH A 1 POINT LOSS ON LOSING TRADES, HOW (spreads and commissions aside) DOES THIS MAKE YOU A LOSING TRADER ?

That is why, in trading, it is always possible to make money but extremely difficult to KEEP the money.
THIS APPEARS TO BE A NON-SEQUITUR FROM YOUR PREVIOUS ASSERTION

The only way to overcome these odds is to find something that really works well; otherwise you are guaranteed to lose all of your money
YOU CAN HAVE A WINNING STRATEGY OF 80% WINS TO LOSSES AND STILL LOSE MONEY IF MONEY MANAGEMENT IS FLAWED.
YOU CAN HAVE A WINNING STRATEGY OF 10% IF MONEY MANAGEMENT IS EXCEPTIONAL

Does anyone have a strategy that can overcome these odds?
MONEY MANAGEMENT IS DERIVED FROM THE INTELLECT OF THE TRADER NOT FROM SOME RANDOM BS ABOUT "ODDS" etc

I've been looking, on and off, for over 30 years and have not found one.
I'D SAY, GRASSHOPPER, THAT THE FAULT LIES WITHIN...



And by the way (recent weeks being the exception due to other commitments), I usually post my trades every day, IN ADVANCE of the market even opening.
So if you want to question my success or otherwise as a Trader, perhaps do a wee bit of research first, eh pal ?
 
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mrsoul

Active member
Feb 7, 2009
323
35
38
#17
im not sure there is one.... i look into it. But seriously you come on here saying you have 30 years of experience and then consider using no stops as a strategy, somebody shoot me.
I never said not to use a stop. If you read what I said it is clear that one must always have a surrender point, but perhaps instead of a stop a reversal entry can be explored-
just food for thought.
 
Feb 3, 2008
69
12
18
#19
I never said not to use a stop. If you read what I said it is clear that one must always have a surrender point, but perhaps instead of a stop a reversal entry can be explored-
just food for thought.
30 years of experience or not? just tell the truth.
 

Hoggums

Well-known member
Jan 24, 2006
2,170
877
123
#20
Sorry everyone - I let my 8 yr old son loose on the computer. He's been duly punished and won't publish such nonsense again.

You can go back to trading now.