What is Traders Biggest Downfall?

[LostPigeonCoo]

This is my first thread, hope you gain something from it.
When it comes to trading, what do you think is traders biggest downfall in losing to the markets?

Emotion, Some people can't deal with emotion that comes with trading, you can only experience this trading with real money.
If your used to winning and start making loses, your emotion will play chaos with your mind.

Don't play the market like a roulette and gamble.
Stick to what you know what works for you, what works for others does not mean will work for you.

TA: Charting that works and gives you gains overall in a month, accept nothing less.
Theres's so many software out there and only a small % work for people,
If 90% of traders lose money, Does that mean those TA software packages are no good? Or do they lack disapenine or greed?

I have set some Poll options for you to vote.

 

[bangzilla]

i'd have to say commitment,
most traders work full time or go to school, which makes it hard to focus fully on trading.
with enough commitment, i think most people can overcome emotion, and properly learn TA.

Of course my opinion has no credibility since im just getting started in this game, lets see what the more experienced guys have to say =)

 

[LostPigeonCoo]

i'd have to say commitment,
most traders work full time or go to school, which makes it hard to focus fully on trading.
with enough commitment, i think most people can overcome emotion, and properly learn TA.

Of course my opinion has no credibility since im just getting started in this game, lets see what the more experienced guys have to say =)

If they are trading for long term 6- 12 months goal, Thats ok, but if they are day traders, they need to be able to be on the ball.

 

[BoarDome]

Ego.

 

[Masquerade]

Being human

 

[mrsoul]

This is my first thread, hope you gain something from it.
When it comes to trading, what do you think is traders biggest downfall in losing to the markets?

Emotion, Some people can't deal with emotion that comes with trading, you can only experience this trading with real money.
If your used to winning and start making loses, your emotion will play chaos with your mind.

Don't play the market like a roulette and gamble.
Stick to what you know what works for you, what works for others does not mean will work for you.

TA: Charting that works and gives you gains overall in a month, accept nothing less.
Theres's so many software out there and only a small % work for people,
If 90% of traders lose money, Does that mean those TA software packages are no good? Or do they lack disapenine or greed?

I have set some Poll options for you to vote.

Being able to manage effectively all the frustrating emotions that comes with the game of trading.

 

[mark456]

What is Traders Biggest Downfall

Ensure you have a documented trading plan, and procedural steps (eg. checklist) for trade entry, management and exit. Ensure that there are no circumstances within your plan that allow for removal of your stop loss. Then as you trade these steps, act as if you were two people (stick with me here, I know it's getting weird) - firstly you're the trader, and secondly you're the boss of your trading firm who is a real fan of risk management and following rules. For every action that you as a trader make in entering or removing an order from the market, pause and assume the identity of the boss of the business - would you be happy with the decision that your employee is making, or would you overrule it? Would you sack the trader if he makes the decision he's about to make? Often this is sufficient to overcome the problem. Assuming the identity of the 'boss' or 'risk management guru' allows our rational side to come through and reinforce the need for taking our small losses.
mark456

 

[mrsoul]

Ensure you have a documented trading plan, and procedural steps (eg. checklist) for trade entry, management and exit. Ensure that there are no circumstances within your plan that allow for removal of your stop loss. Then as you trade these steps, act as if you were two people (stick with me here, I know it's getting weird) - firstly you're the trader, and secondly you're the boss of your trading firm who is a real fan of risk management and following rules. For every action that you as a trader make in entering or removing an order from the market, pause and assume the identity of the boss of the business - would you be happy with the decision that your employee is making, or would you overrule it? Would you sack the trader if he makes the decision he's about to make? Often this is sufficient to overcome the problem. Assuming the identity of the 'boss' or 'risk management guru' allows our rational side to come through and reinforce the need for taking our small losses.
mark456

good post mark- it's helpful to think that way.

 

[rathcoole_exile]

wasting too much time on bulletin boards and not enough time
a) studying the markets
b) enjoying life

 

[virtuos0]

Seems to me that a traders biggest downfall is the abundance of misinformation freely available, and the absence of any way to filter the good from the bad.

 

[monetssamba]

i think unless you have some sound ta methods if ta is all you use then youve got no chance from the start but once you have that compulsion can be a big problem - the need/desire/habitual continuation to be involved. this probably comes under over trading or discipline problems. if for example someone loved a gamble on the horses in a non professional capacity for many years before they encountered speculation it may be hard not to find themselves degenerating into those old feelings of excitement and thrill seeking that can lead into suddenly finding themselves in a trade they shouldnt be inand it seems to me unless youre incredibly proficient that means being involved in plenty of sub optimum trades which erase all/any winning results. so i vote lack of ta or experience or compulsion/gamble/discipline

 

[robster970]

Once I'd figured out how to trade (which in itself took about 1 year) I then got over-enthusiastic and jumped into trades just to be in the market, drawing lines on 5m timeframes that didn't really have significance, etc, etc.

It took me a while to figure out that I just need to follow my own methods and let the market arrive at these entry/exit points instead of trying to be in the market all the time.

The consequence of all this is a profitable method and a more relaxing time doing it. It pays to be disciplined.

 

[LostPigeonCoo]

I like the fact that you all generally voted Emotion, with the highest votes, experience or not that can still effect you when trading.

 

[HawkTrader]

Want everything now, Want instant millions and greed are all basically the same things. But I do think emotion (which too involves greed) is the main factor. That and lack of experience.

 

[tenbobtrader]

voted for lack of experience

emotional involvement and problems from imvho come from above

how do you get experience


Id, ego, and super-ego - Wikipedia, the free encyclopedia

"To the ego, the present moment hardly exists. Only past and future are considered important. This total reversal of the truth accounts for the fact that in the ego mode the mind is so dysfunctional. It is always concerned with keeping the past alive, because without it - who are you? It constantly projects itself into the future to ensure its continued survival and to seek some kind of fulfillment or release there. It says 'One day, when this, that or the other happens, I am going to be okay, happy, at peace'. Even when the ego seems to be concerned with the present, it is not the present that it sees: It misperceives it completely because it looks at it through the eyes of the past. Or it reduces the present to a means to an end, an end that always lies in the mind-projected future. Observe your mind and you'll see that this is how it works.

The present moment holds the key to liberation. But you cannot find the present moment as long as you ARE your mind"

Eckhart Tolle



later

Andy

 

[AlexisD]

voted lack of experience, and mean by that: lack of understanding that a profitable trading method is the hardest part of trading.

Alex

 

[LostPigeonCoo]

Maintaining wins, going against your trading method for sake of a trade.

 

[GladiatorX]

I think its that subconsiously lots traders want to be right rather than make money, even if in their mind they think its the money.

 

[blood13]

to me being right and making money are the same thing. when im wrong i lose money

 

[GladiatorX]

to me being right and making money are the same thing. when im wrong i lose money

...
Yeah but if your always like 'I think the market is going to fall so i'm going to short'...
Then your trying to be right...
'I called the top'
'I shorted when Gold was rising'

Its trying to be right rather than do the easy things in trading.

When i'm wrong, for example thinking something is going to fall and it doesn't; I won't have lost money because i won't have put money on it to 'prove' that i'm the best and that i called the market... Because i would just wait for a solid trend to appear and then take a small piece of it; with no ego involved.

When i start trying to predict the market bottom; I'm trying to be right and i'll probably lose; When i accept the current direction and don't get my ego involved in trying to predict the change... I make money.