Why do so few succeed?

[CJIA]

Pain is the greatest teacher.

The pathway is through pain , then comes awareness , through awareness comes understanding :-0 ,through understanding comes acceptance :| ,through acceptance comes change .
This is difficult path to stay on and i feel that this is why so few succeed.

 

[new_trader]

Why people fail:

http://www.time.com/time/digital/reports/daytrading/nightmare.html

 

[Splitlink]

I agree completely. Many people (I would say the majority) have little curiosity about the Universe around them. I had a discussion with someone about the type of questions every adult should be able to answer. The type of questions a curious child would ask them. One questions I though of was:

Q. Why does the earth have seasons?

I asked many EDUCATED adults this question and these were the most common answers given:

1. The earth moves closer to the sun in summer and further away in winter. (They couldn't explain why Northern and Southern hemispheres experience opposite seasons)
2. Don't know, never thought about it.
3. Don't care, what's on TV?

I'm sure these people would be "interested" in Day Trading if they heard "You can make lots of money". I am firm in my belief that IQ and EQ are fundamental factors in determining success or failure. This doesn't mean that intelligent people can't fail, but I would say that only above average people can succeed.

I'm sorry. I can't believe that the people to whom you asked that question were educated. They might be able to add a column of figures but there is a serious lapse in their education.

Split

 

[Bigbusiness]

I am firm in my belief that IQ and EQ are fundamental factors in determining success or failure. This doesn't mean that intelligent people can't fail, but I would say that only above average people can succeed.

I remember when I watched the Mark Fisher seminars, he mentioned that most of the well educated people he trained failed as traders. Some of those that didn't seem as intelligent went on to succeed. I think he put that down to the intelligent people thinking too much and trying too hard, while the less intelligent people were more likely to stick to simple methods and not try to tamper with them.

That makes a lot of sense to me. A highly intelligent person might have more problems admitting they are wrong and that is something a good trader has to be able to do.

Just look at some of the good traders here and you will see that there is no need for a high IQ

 

[jezza888]

Just look at some of the good traders here and you will see that there is no need for a high IQ

I can relate to that! I spend my spare time jumping out of planes and off cliffs and earn a living trading!

 

[chump]

multi lingual ..mathematician ..leading IT consultant...futures acct blown

ex director blue chip finance ...no longer spreadbets after 'bitten'

ex international finance director...lost nearly 50% of asset value investing

All of the above I know personally and they all have some commonality...they are all undoubtedly 'intelligent' in their chosen careers ...they all have accrued a 'contempt' for money through having had 'too much' of it for too long...they are all accustomed to being successful in what they attempt.....AND they all failed to have a plan ...why do they need one ..they are afterall intelligent , successful , and quite wealthy surely that's enough ! No , obviously it is not. Most of the frailties that we can spot from these examples can be traced back to a simple lack of awareness ...these individuals could probably all have succeeded ,but they failed instead because they had lost (if they had had any) their awareness....that is to know why you are doing what you are doing and what you are trying to achieve , how you have identifed you are going to achieve (control mechanisms) and the blending of this into an ongoing plan. A PLAN ...if you have that sorted correctly you have put the probabilities on your side.

For the pain and torturous journey proponents I can only say this...no pain , no torture here ...time and some application yes...ah but who am I to say this afterall I am not a master trader...rubbish ...to be successful you don't need to be a master trader you just need to have an ongoing plan that meets your needs ...that is success and enough of it and you will also have to start making sure you don't lose your awareness...it isn't a one off event it's an ongoing process.

What I see on this thread and forum is a tendency for people to draw from their own experience and then over generalise that this must be the same process for everyone ..along comes trader 2 citing the same experience and what you get is that moment of recognition 'me too' which simply solidifies their beliefs that this must be the only way ...chaps I have no illusions that you will believe me when I tell you you are wrong ,but you are wrong. The process will be whatever you bring to it and make it. If that's pain and torture and soul searching for you fair enough just don't make the mistake through a lack of awareness that it is and has to be the same for everyone..it doesn't or do you think I was laughinging from torture on the ski slope yesterday while my trades were running.
I can certainly understand that if people have had a torrid time they might find comfort in thinking it had to gone through to achieve their goal ,but truly this is a simple rationalising of their individual position ..nothing more ..it certainly is not a FACT in any testable sense which seems to be what is being implied.

The common saying is treat trading as a business...ok then your first steps are to start asking the right questions ...why do I , what do I expect , what do I need , when shoud I , how should I etc etc ...plan plan and plan some more ..the more planning you do the less emotional you will need to be in executing your plans.

 

[new_trader]

I'm sorry. I can't believe that the people to whom you asked that question were educated. They might be able to add a column of figures but there is a serious lapse in their education.

Split

Doubt me if you wish but try it yourself. You WILL be surprised. Besides, as was stated, it's the lack of curiosity not lack of education.

When I refer to "Intelligence" I refer to a score derived from a set of standardized tests developed to measure a person's cognitive abilities ("intelligence") in relation to their age group.

http://en.wikipedia.org/wiki/IQ

How many people here even know what their IQ is? I can't see how you can present a valid argument if you don't. Sure, you can say trading is easy, but you may be a genius!

 

[darktone]

multi lingual ..mathematician ..leading IT consultant...futures acct blown

ex director blue chip finance ...no longer spreadbets after 'bitten'

ex international finance director...lost nearly 50% of asset value investing

All of the above I know personally and they all have some commonality...they are all undoubtedly 'intelligent' in their chosen careers ...they all have accrued a 'contempt' for money through having had 'too much' of it for too long...they are all accustomed to being successful in what they attempt.....AND they all failed to have a plan ...why do they need one ..they are afterall intelligent , successful , and quite wealthy surely that's enough ! No , obviously it is not. Most of the frailties that we can spot from these examples can be traced back to a simple lack of awareness ...these individuals could probably all have succeeded ,but they failed instead because they had lost (if they had had any) their awareness....that is to know why you are doing what you are doing and what you are trying to achieve , how you have identifed you are going to achieve (control mechanisms) and the blending of this into an ongoing plan. A PLAN ...if you have that sorted correctly you have put the probabilities on your side.

For the pain and torturous journey proponents I can only say this...no pain , no torture here ...time and some application yes...ah but who am I to say this afterall I am not a master trader...rubbish ...to be successful you don't need to be a master trader you just need to have an ongoing plan that meets your needs ...that is success and enough of it and you will also have to start making sure you don't lose your awareness...it isn't a one off event it's an ongoing process.

What I see on this thread and forum is a tendency for people to draw from their own experience and then over generalise that this must be the same process for everyone ..along comes trader 2 citing the same experience and what you get is that moment of recognition 'me too' which simply solidifies their beliefs that this must be the only way ...chaps I have no illusions that you will believe me when I tell you you are wrong ,but you are wrong. The process will be whatever you bring to it and make it. If that's pain and torture and soul searching for you fair enough just don't make the mistake through a lack of awareness that it is and has to be the same for everyone..it doesn't or do you think I was laughinging from torture on the ski slope yesterday while my trades were running.
I can certainly understand that if people have had a torrid time they might find comfort in thinking it had to gone through to achieve their goal ,but truly this is a simple rationalising of their individual position ..nothing more ..it certainly is not a FACT in any testable sense which seems to be what is being implied.

The common saying is treat trading as a business...ok then your first steps are to start asking the right questions ...why do I , what do I expect , what do I need , when shoud I , how should I etc etc ...plan plan and plan some more ..the more planning you do the less emotional you will need to be in executing your plans.

Agreed, but! in general most noobs wont approach it in this manner! I know i didnt when i started out and being the sort of person who insists on finding his own way (ie the bloody long way round! ) and wont be told.. well.. it has been torturous at times! lol (i wouldnt class myself as successful yet either!).. The torture has burnt lessons into me of which most could be covered by "fail to prepare.. then prepare to fail"..This is in hindsight for me though.. Im guessing it is for you too.

Perhaps im missing your point? correct me if im wrong no probs.
cheers

 

[Bigbusiness]

Doubt me if you wish but try it yourself. You WILL be surprised. Besides, as was stated, it's the lack of curiosity not lack of education.

When I refer to "Intelligence" I refer to a score derived from a set of standardized tests developed to measure a person's cognitive abilities ("intelligence") in relation to their age group.

http://en.wikipedia.org/wiki/IQ

How many people here even know what their IQ is? I can't see how you can present a valid argument if you don't. Sure, you can say trading is easy, but you may be a genius!

http://www.trade2win.com/boards/showthread.php?t=6373

121 when I did this test but 135 when I did one more recently. 96 after a bottle of wine

 

[PKFFW]

Doubt me if you wish but try it yourself. You WILL be surprised. Besides, as was stated, it's the lack of curiosity not lack of education.

When I refer to "Intelligence" I refer to a score derived from a set of standardized tests developed to measure a person's cognitive abilities ("intelligence") in relation to their age group.

http://en.wikipedia.org/wiki/IQ

How many people here even know what their IQ is? I can't see how you can present a valid argument if you don't. Sure, you can say trading is easy, but you may be a genius!

Mines around 145 depending on the test and my state of mind when taking it.

Intelligence isn't everything though. Someone of average intelligence with the will and persistance to exercise that average intelligence will outperform someone of superior intelligence without the persistance or will. My brother is a prime example. He is quite literally classed as a genius on every IQ test he takes. He has no common sense at all and he works as a security guard because he couldn't be bothered doing anything else. It's kind of sad really but it's his life.

It's all comes back to the individuals desire to continue until they succeed and not to accept anything else.

Cheers,
PKFFW

 

[new_trader]

Mines around 145 depending on the test and my state of mind when taking it.

Intelligence isn't everything though. Someone of average intelligence with the will and persistance to exercise that average intelligence will outperform someone of superior intelligence without the persistance or will. My brother is a prime example. He is quite literally classed as a genius on every IQ test he takes. He has no common sense at all and he works as a security guard because he couldn't be bothered doing anything else. It's kind of sad really but it's his life.

It's all comes back to the individuals desire to continue until they succeed and not to accept anything else.

Cheers,
PKFFW

I agree, my sister measures well over 140 but lacks confidence or motivation. She has a Degree yet works as a cleaner! I think it's a matter of horses for courses but I don't believe that a person of average intelligence will always achieve purely on persitence alone. That supports the infinite monkey theorem.

 

[chump]

"I don't believe that a person of average intelligence will always achieve purely on persitence alone. That supports the infinite monkey theorem" .....may be maybe not

2 out of 3 people mentioned in my earlier post score in the 150+ on mensa tests ...I'm bog standard average on those tests ..on an asset value basis I've achieved more ..how would you explain that if i may ask ?

My opinion for what it is worth is that 'intelligence' as we try to assess it using tradional methods just does not capture 'intelligence' in a manner that can explain achievement..oh we'd like it to if only because our educational system and everything we have invested in it would then be satisfied and be thought to be a rational way to apply resources to personal development..trouble is it just doesn't fit with reality does it. Reality being the operative word.

Dark,
sorry , but I don't fit into that profile..no mountains climbed...sleepless nights ...just planning and more planning. Torture burnt..no I'll do my learning watching you do yours ...LOL more effective way of moving from A to B

 

[new_trader]

"I don't believe that a person of average intelligence will always achieve purely on persitence alone. That supports the infinite monkey theorem" .....may be maybe not

2 out of 3 people mentioned in my earlier post score in the 150+ on mensa tests ...I'm bog standard average on those tests ..on an asset value basis I've achieved more ..how would you explain that if i may ask ?

My opinion for what it is worth is that 'intelligence' as we try to assess it using tradional methods just does not capture 'intelligence' in a manner that can explain achievement..oh we'd like it to if only because our educational system and everything we have invested in it would then be satisfied and be thought to be a rational way to apply resources to personal development..trouble is it just doesn't fit with reality does it. Reality being the operative word.

Dark,
sorry , but I don't fit into that profile..no mountains climbed...sleepless nights ...just planning and more planning. Torture burnt..no I'll do my learning watching you do yours ...LOL more effective way of moving from A to B

I am not trying to explain it. I also don't want to be quoted out of context. I agree that intelligence will NOT gurantee success but in certain fields it has definite advantages. A work colleague, who is an Engineer said to me, "An engineer can do with 20cents what any idiot can do with $1"

Logic and reasoning are things that IQ tests measure well and these two things are essential to being a good trader IMO.

 

[CJIA]

"I don't believe that a person of average intelligence will always achieve purely on persitence alone. That supports the infinite monkey theorem" .....may be maybe not

2 out of 3 people mentioned in my earlier post score in the 150+ on mensa tests ...I'm bog standard average on those tests ..on an asset value basis I've achieved more ..how would you explain that if i may ask ?


Dark,
sorry , but I don't fit into that profile..no mountains climbed...sleepless nights ...just planning and more planning. Torture burnt..no I'll do my learning watching you do yours ...LOL more effective way of moving from A to B

It's very much to do with your personal make-up.
As trading attracts mainly gamblers and risk takers they find it hard to adhere to planning and management and execute trading as a business,this therefore can take them down the path i previously mentioned.
If however your personal make up and life experience allowed you to circumnavigate this path and brought you to appreciate that trading should only be run as a business,then i must applaud you on your good fortune or on the guidance you received.
However i will say that risk takers and gamblers will have gained a good understanding of the market while travelling down this path and the ones that survive will end up being very good traders.

CJIA

 

[charliechan]

I remember when I watched the Mark Fisher seminars, he mentioned that most of the well educated people he trained failed as traders. Some of those that didn't seem as intelligent went on to succeed. I think he put that down to the intelligent people thinking too much and trying too hard, while the less intelligent people were more likely to stick to simple methods and not try to tamper with them.

That makes a lot of sense to me. A highly intelligent person might have more problems admitting they are wrong and that is something a good trader has to be able to do.

Just look at some of the good traders here and you will see that there is no need for a high IQ

intelligent people tend to look for facts and figures to back up their decisions. this is what college and society teaches us to do.

dumbos like me try and rely on intuition and experience of the unknown.

while mr smart a$s is busy waiting for $ to cross the next technical level to confirm his opinion of strength, he is missing out on the move, and ends up buying at the top (or near to). the same is true of the fundamental based investor. by the time the company reports are confirming his views, the business cycle is nearing its end.

there is more risk in the later part of the move than the beginning when there is perceived to be less confirmation.

however, i have to admit to knowing some very bright and well educated people who are excellent traders. one of whom posts here regularly (but has not posted on this thread i think). he is far too humble (another quality of all great traders) to want me to mention who - so i wont - so dont ask

i also have known some incredibly 'dumb' people in academic standards who are also extremely good traders.

iq i feel has little to do with it.

self belief and self image are far more important. experience comes next.

 

[dbphoenix]

intelligent people tend to look for facts and figures to back up their decisions. this is what college and society teaches us to do.

Well, not exactly. Some of them/us look for facts and figures, then make decisions based on what they/we find.

Not sure what any of this has to do with intelligence. I know some pretty intelligent people who believe the most bizarre things.

 

[tunnel1x1]

Re:


“Who are the few who are succeeding?” The few who are succeeding are the ones who have expanded out their ‘list’ to almost as complete as the ‘archetypically ideal list’ of actual issues that must be resolved. Then they have brought into awareness, acknowledged and ‘cleared’ a very high percentage of those issues. It really doesn’t matter what statistics one uses (80%, 95% lose etc yada yada) or which intruments or which timeframes are used for illustration or discussion. The real issue is –
If you don’t have 96% + of your complete list ‘cleared’ (ie nothing inside you conflicts re that issue) then you have NO chance of being in the elite.
If you don’t have 78% of your complete list ‘cleared’, then your accounts will ultimately be closed.

You can either OPEN your list or CLOSE your list to additional issues.
And how can you ‘clear’ issues if you won’t even acknowledge them onto your list?
You can either avoid issues on that list or take some self risks and go into them and resolve them. The few who are succeeding have done that at whatever levels they needed to.

In advocating building and maintaining a large ‘list’, please don’t read into this that I’m advocating that you never distill things down to the essence. Also don’t impune that I’m advising that you constantly have a multitasking, scattered, hyperactive task list and not have have a current focus or dominant concern. Distill and focus - Do those things, and do them well. But also, as appropriate, stop and swell your list with previously unconsidered alternatives, with those things you secretly hoped wouldn’t be a part of making it in trading, with issues that bring up resistance, with conflicting energies that put your mind and soul at risk, with needed states, acts, relations that speak to a whole life – no one will do that for you and although much of it does happen automatically, some of it will not. Fully intend to let no neurosis, arrogance, inflation, even confidence, OR despair, resistance, conflict, or indolence sway you from brutal self examination and resolution. Others can help you identify your unresolved, your unknowns, your blind spots. Others can help you with ways to ‘clear’ an item. But only you can actually clear them.

Regarding the allegations from the ‘discouragement fraternity’ ( aka The BrotherHood of Socrates Bashers ) about space, balloons (btw good analogy db), ‘somethings’ - just remember that most of the collective is boxed into a certain band of frequencies and just because those are the only ones we can communicate about easily with words, and just because those are the only ones that are consistently practical; does not mean that those frequencies are the only ones that exist (are you listening, db?) or are where all of YOUR answers will be found (do you understand now, db?) . The great percentage of the list and resolutions WILL be found in the normal band – but a small, but extremely crucial to success, percent will be found in those areas ‘hidden’ from the collective and opened just to you. Stay left brained and ‘grounded’ and leave those off your list at your own peril.

Some are saying, it only matters what you DO / NOT DO to succeed. Just stick with “these” rules, blind yourself to all else, and your account will grow. Others remind them that who you BE / NOT BE is just as, if not more, important (can you say Plato? ). Even fewer include HAVE / NOT HAVE at the genesis and woven into the process. etc etc I’m saying get all these sets solidly up front in your awareness and shepherd all of them forward. That's anything but one dimensional. The few who are succeeding have done that at whatever levels / frequencies they needed to – whether they were born mostly ‘clear’ or had to go through Hades and beyond – they all persisted in the real priorities (instead of just the easy fun ones) until they were ‘cleared’. Explicitly and consciously get items onto your list from each of these 'headings' and more. Keep your master list large and with “passion and gradualness” (Pavlov or one of his slobbering K9’s) work to ‘clear’ every item on your list. When beyond a certain percentage is ‘cleared’, you literally can not fail.

Speaking of ‘beyond’ - Let’s lighten up a little bit.
We’re among friends right?
T2W - what a dream site???!!!
We got a Pheonix that won’t rebirth.
We got a Socrates who won’t ask questions.
And for some (deep inter dimensional) reasons, they dream a fight
What kind of world is this place?
Many of you are already to the underworld as I pen this.
Hope you don’t get even stranger nightmares now…

At least twice now - maybe more to some...
I haven’t said enough I’ve said too much

All the best,

zdo

ZDO,

Can you give some guidance on how one goes about clearing the lists or introspection? My tangible problem in trading is that I pick a large majority of trades that quickly turn out to be losers - either that same day or the next. At this point, I have no trouble placing stop losses, and no trouble leaving them where they are placed. I also keep losses per trade small - such as 2-3 %. So, I cannot identify with the experts who talk about the traders blowing their accounts out on one or two bad trades. No, mine is more the death of a thousand cuts.

After having this happen enough, I finally decided that there must be something psychologically that is causing me to enter at the wrong times. Perhaps self sabotage. On the other hand, I still think that maybe there is something technical I can do to improve my timing. Maybe that's just an illusion I tell myself. You seem to indicate that once the psychological barriers are cleared, the tangible parts of trading will fall into place.

I've been at this a few years, and I have gone through the Mark Douglas exercise of religiously following a mechanical system over 30 trades. I was able to follow the system consistently with no real deviation. I gained psychologically from it, but the system ended up a loser.

So, any concrete guidance on how to deal with the lists, as you describe them? Does one sit and meditate? Does one have an in depth conversation with oneself about what's the problem? Self hypnosis? Writing a journal? How does this process work?

tunnel

 

[mickandpete]

I started reading this thread early on.then we had all the usual suspects giving it THIS WAY/ THAT WAY Mind set/No mind set
There are a number of points I wanted to make,didnt bother, cant be b othered to read all 30 odd pages, so if these points have been raised in the thread I appologize.
I am a FX trader
Whenever reading this sort of thread I find it hard to relate the posters remarks to the arguement because I dont know what market they trade.
STOCKS: Most people fail because they just CANNOT know enough about their stocks.
That is not only how they are fairing but also OUTSIDE perceptions of how they are fairing.
Take the recent results of Goldmans Merryl/Lehmans etc. The analysts at these firms are paid a FORTUNE but it would appear they cant even get their own sector right.What chance you or I???
OK Now to my market FX
The FIRMEST statement often stated on here is "For every deal there has a winner and a loser."
WRONG
The worlds economy is like a huge giant enormous pyramid
At the base we have the end users, the consumers, you and I.
Every item sold across currencies,( currenciies not borders EU Euro members excepted here) carries a tiny % of its price as currency exchange cost..These tiny charges are passed up the pyramid untill they reach the pinnaclle THE SPOT MARKET, These tiny charges accumilate into ?illions (?= I dont know) and this is what the Huge organisations tthat spend ??illions on staff premises support scrap over.
So along comes our trader.
Where does he start after reading all the books?
Cable/Euro/Yen
Pros are paid a Kings ransom ,given 5 kings ransoms in support to trade the SHARP END
So what does our trader do??
He tries to find TOPS & BOTTOMS of the market ON THE SAME DAY.
The pros cant do that!!

 

[TheBramble]

My tangible problem in trading is that I pick a large majority of trades that quickly turn out to be losers - either that same day or the next.

Then find another method for identifying setups. That's your problem.

At this point, I have no trouble placing stop losses, and no trouble leaving them where they are placed. I also keep losses per trade small - such as 2-3 %.

That's SMALL???

Tunnel - if I had a system that 'kept my losses' to 2-3% I wouldn't be feeling too good. That isn't risk/money management.

After having this happen enough, I finally decided that there must be something psychologically that is causing me to enter at the wrong times. Perhaps self sabotage. On the other hand, I still think that maybe there is something technical I can do to improve my timing. Maybe that's just an illusion I tell myself. You seem to indicate that once the psychological barriers are cleared, the tangible parts of trading will fall into place.

No. Your system is crap. If you're not doing what your system tells you to do - that's psychological. If you're doing what your system tell you to do - and you keep losing - your system is crap.

I've been at this a few years, and I have gone through the Mark Douglas exercise of religiously following a mechanical system over 30 trades. I was able to follow the system consistently with no real deviation. I gained psychologically from it, but the system ended up a loser.

Aaaarrghhh....Change. Find a new system. Any system. Doesn't matter which. Divorce your current system.

So, any concrete guidance on how to deal with the lists, as you describe them? Does one sit and meditate? Does one have an in depth conversation with oneself about what's the problem? Self hypnosis? Writing a journal? How does this process work?

There are no lists. That was just ZDO's abstract. Choose a really simple system that has stood the test of time in making money. Channel break outs for instance.

Spend the next 5 days becoming an expert in channel breakouts.

Fix your rules for entry and exit.

Do not deviate.

Trade your system

Does this make a difference?

 

[TheBramble]

There is a very simple answer to this question, who care's why so few succeed !

That isn't an answer. It's an attempt to be cute. And it doesn't help anyone.