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

[rathcoole_exile]

Cheers H.
But before you send the miscreant to bed without his supper, can you ask him, what was the POINT, the OBJECTIVE of his original post ?
Even after reading it several times and refuting some of the nonsense he scrawled with his crayon, I still can't fathom the REASON for his post in the first place.

cheers La,
r_e

 

[Masquerade]

Ask Spanish

You can put a lot of slants on it - but bottom line when spanish traded without a stop he was a winning trader. Put in some knowledge, compound and play the numbers well and you can make a lot and get out before the inevitable happens. Spanish demonstrated you can trade that way a long time without getting burnt. If he compounded effectively he'd have made a lot more.

 

[tar]

leverage is the main reason !

 

[0007]

You can put a lot of slants on it - but bottom line when spanish traded without a stop he was a winning trader. Put in some knowledge, compound and play the numbers well and you can make a lot and get out before the inevitable happens. Spanish demonstrated you can trade that way a long time without getting burnt. If he compounded effectively he'd have made a lot more.

Fair point - there's no doubt that Spanish had a lot of potential.

 

[Mister7]

The "real" reasons

It is true that most lose the game.

Here is my two cents on why:


Greed

Short time frames-Everyone wants to over trade as some get rich quick scheme

In short time frames, the cost of your trade is too great a percentage to your win potential. 3 pips spread on a five pip win etc.

For all but those with inside info or rigged data feeds, scalping for profit is a myth

Most do not understand at all what makes the market move, and shouldn't really be trading

Most trade with bucket shops, and their money never really sees the market

No patience to wait for real trading opportunities, such as those defined by Fibs, True S & R, and Impulse/retracement waves.

Most traders change strategies and or parameters of their strategies without letting them play through at least 20 trades to test their validity.

 

[Masquerade]

Fair point - there's no doubt that Spanish had a lot of potential.

Well I wasn't talking about him - more the trading without stops and being able to cheat the numbers for a long time. As a trader my opinions may be different but i'm not going there.

 

[Splitlink]

You can put a lot of slants on it - but bottom line when spanish traded without a stop he was a winning trader. Put in some knowledge, compound and play the numbers well and you can make a lot and get out before the inevitable happens. Spanish demonstrated you can trade that way a long time without getting burnt. If he compounded effectively he'd have made a lot more.

How do you get out before the inevitable happens. When is it going to happen? I think that talking on here about trading without stops is irresponsible because so many new guys will get the wrong idea. I see no long term advantage, at all, for trading without stops. The more one gets away with it, the more one will think that it will be ok one more time. Until the last time.

BTW, don't forget the margin requirement, either. I seem to remember that
Spanish was fairly short of cash. Well, that is not a good situation to be in when margin calls start comng .

 

[0007]

Well I wasn't talking about him - more the trading without stops and being able to cheat the numbers for a long time. As a trader my opinions may be different but i'm not going there.

I agree - you can cheat the numbers for a while & even be lucky and get away with it - but how do you know how to get out before the inevitable? And if it's inevitable then surely it will happen? As you infer, not having a stop will get you in the end. Bit like not wearing a seatbelt IMO. I must admit that I learnt the hard way about stops. But where do you put them? ...... that's another story and very important etc etc.....depends on your trading style and the size and material of which your balls are constituted.

 

[rathcoole_exile]

Bit like not wearing a seatbelt IMO.

or going bareback with bangkok bargirls ..... great fun while you're lucky, BUT ......

 

[tomorton]

Mr Soul is speaking complete nonsense when he says that as there are 2 ways of losing but one of winning, the odds must be 2 to 1 that you will lose. That's like saying that if you're driving down a narrow country road with a ditch down each side, because you could either 1) crash into the left ditch or 2) crash into the right ditch, or 3) carry on down the road, it must be twice as likely you will crash. Rubbish. It obviously depends on how you drive.

Better to improve your driving before you start talking rubbish on your phone to the other drivers in the area. Find out why you crash and stop doing it.

 

[rathcoole_exile]

Mr Soul is speaking complete nonsense when he says that as there are 2 ways of losing but one of winning, the odds must be 2 to 1 that you will lose. That's like saying that if you're driving down a narrow country road with a ditch down each side, because you could either 1) crash into the left ditch or 2) crash into the right ditch, or 3) carry on down the road, it must be twice as likely you will crash. Rubbish. It obviously depends on how you drive.

Better to improve your driving before you start talking rubbish on your phone to the other drivers in the area. Find out why you crash and stop doing it.

yeah but you're a swede, a carrot crunching yokel.

the way you boyz drive yer tracterz, any one of us could end up in either ditch .....

 

[rathcoole_exile]

oops, a bit of constructive criticism and it seems Mister R Sole has gone AWOL.......

 

[tomorton]

Oi knows a ditch when oi seez it. Close up.

 

[shadowninja]

I firmly believe that I will never be able to trade profitably.

EFA.

Thing is, I've been training in martial arts for over 30 years. I can jump really well. Try as I might, however, I cannot jump higher than my house. I don't think man will ever land on the moon.

 

[wackypete2]

Don't forget about the 3rd way to lose! When Uncle Sam takes his fair(?) share of your winnings.

Just some seasonal humor. My brain is fried from my taxes this past week

Peter

 

[theroguetrader]

The real reason most traders loose...!!

not letting profits run - (FEAR)........... !!


letting losses exceed profits - (GREED)..........!!


old cliches - but true... !!

 

[Rossini]

I agree - you can cheat the numbers for a while & even be lucky and get away with it - but how do you know how to get out before the inevitable? And if it's inevitable then surely it will happen? As you infer, not having a stop will get you in the end. Bit like not wearing a seatbelt IMO. I must admit that I learnt the hard way about stops. But where do you put them? ...... that's another story and very important etc etc.....depends on your trading style and the size and material of which your balls are constituted.

I read a research paper a while ago (i'm pretty sure I got the link from someone on here?) The paper was investigating the affect of stop losses on the equity curve. The results where quite interesting, it showed that while stop losses can be used as an effective tool, they make the equity curve much more volatile (as you might expect). The interesting bit for me was the conclusion that no stop loss should be used and multiple accounts should be traded instead.

Obviously this makes the expectancy of short term profitability higher and a more stable equity curve, while the multiple accounts (with diversification of trading non correlated instruments) keeps the odds of a total wipe out smaller.



I'm not saying do not use a stop! I always have a mental stop that I will not let my trade go through, but if I find the link I will post it.

 

[george1982]

u wanna give it up!!

 

[HaloTrader]

Mrsoul - THis is absolute crap...

Just because there are three outcomes it doesn't mean 33% odds.

There are two outcomes when i try to fly, - Fly to the clouds or not fly at all - its not 50/50 i can tell you..........

Furthermore, 30 years in the market and a failure to understand that its not about the strategy but about the trader himself and i can see you've wasted your time... By now you should have realised that if it takes 30 years and still no profit you probably aren't set out to be a trader.

Its like trying to become a proffesional footballer at 50.

 

[HaloTrader]

I read a research paper a while ago (i'm pretty sure I got the link from someone on here?) The paper was investigating the affect of stop losses on the equity curve. The results where quite interesting, it showed that while stop losses can be used as an effective tool, they make the equity curve much more volatile (as you might expect). The interesting bit for me was the conclusion that no stop loss should be used and multiple accounts should be traded instead.

Obviously this makes the expectancy of short term profitability higher and a more stable equity curve, while the multiple accounts (with diversification of trading non correlated instruments) keeps the odds of a total wipe out smaller.



I'm not saying do not use a stop! I always have a mental stop that I will not let my trade go through, but if I find the link I will post it.

Mental stops are for losers.
If you cannot find a good place to put a stop loss then its a bad trade.
Mental stops create a clause in your head that says 'I may hold this if its a loser, just on gut instinct'
Emotions during trading = Loss of capital

Whats the point in a mental stop if you can have a proper one???? It allows you to keep a loser. NICE