Why do so few succeed?

[htp80]

Over the even years of my involvement with the markets, commodities, stocks and emini day trading, I've heard the number "90%" as the failure rate frequently put out. I've no idea if that is accurate or not, I do suspect it probably is based on my own experience and that of several close trader friends I came to know over this time period.. These are smart people, 45-65, who've had success in other fields (required in order to have any capitol to trade with).

Out of the entire group, not ONE of us has had much success in the markets. We've all gone through the required "riies of passage": expensive seminars, expensive software, a ton of books, psychological trading coaches, and thousands of hours of screen time. The net result of which several stopped trading, having lost most of their trading capitol, and moved on to more productive "hobbies". A few of us, battle scarred and blooded, carry on.

If I were to ask myself the question, "Why have you failed to be successful as a trader"? I would not hesitate to answer " We have met the enemy, and it is us" When I started trading in 1999, it was a LOT easier, the momentum in the market was strongly bullish and of course I, like most people, thought it was a piece of cake: buy a stock today, sell it 2-3 days later at a huge profit. Where's the problem? Well, the problem is, as we all know, the bubble burst and the past 6 years have been very very difficult , even for the very best traders.

The other reason, is the incredible arrogance that seems to be pervasive in new traders, probably due, at least in part, to the endless hype and nonsense we are exposed to by the "Trading-Made -Easy" software venders and the CNBC Wall St infomercials on "how to make millions trading" crowd. One expects to buy a very expensive peice of software, attend a seminar or two, read a few books and watch the money rain down. One would not expect to be successful in the "standard" career fields, law, medicine, engineering, etc etc, without putting in many years of hard work and training, but somehow, new traders seem to think the markets are different. The irony is, one CAN put in years of hard work and training in the markets AND still have no success. Someone posted "Knowledge" , or rather lack of it, as being the "reason" so many fail. Not true. There are many knowledgable trading gurus out there who make a nice living teaching wannabies how to trade, they know eveything there is to know about HOW to trade, technical analysis, etc. But they don't trade! We "think" that by associating ourselves with succsssful traders that somehow THAT will get us to the Promised Land, also not true.

The knowledge we need is within us, not outside. Find out who you are.

Hi Laird154,

Your post is both thought provoking and interesting. I'd like to pick up on your final sentence re: soul searching.

In response to the questions about the low success rate within trading I believe Jerry Olsen posted " This art form is not rocket science. It's simply understanding what youre seeing and reacting to it quietly, relaxed with utter confidence that you know what your doing is going to make that trade a winner." and Jezza888 posted " Because most are not interested in learning... just too interested in a quick buck that never appears "

I fully agree with Jerry and Jezza888 and I too have a fairly simplistic view of the relationship between success and failure. To succeed and to win long term I believe you have to work consistently at an elite level. You have to possess a deep motivation to excel and dominate in a competitive environment. This also applies to life in sport and business.

If prior to opening their first ever position each new trader asked themselves one question, the success to failure ratio would make much better reading.

The question that should be asked does not relate to intelligence, or number of books they are prepared to read or even the number of trading seminars they have signed up for, it is quite simply:

Is winning your driving passion?

if it is, then welcome on board. if it isn't then it is best to stay out.

Enjoy the week ahead.

htp80

 

[Jerry Olson]

Hi Laird154,

Your post is both thought provoking and interesting. I'd like to pick up on your final sentence re: soul searching.

In response to the questions about the low success rate within trading I believe Jerry Olsen posted " This art form is not rocket science. It's simply understanding what youre seeing and reacting to it quietly, relaxed with utter confidence that you know what your doing is going to make that trade a winner." and Jezza888 posted " Because most are not interested in learning... just too interested in a quick buck that never appears "

I fully agree with Jerry and Jezza888 and I too have a fairly simplistic view of the relationship between success and failure. To succeed and to win long term I believe you have to work consistently at an elite level. You have to possess a deep motivation to excel and dominate in a competitive environment. This also applies to life in sport and business.

If prior to opening their first ever position each new trader asked themselves one question, the success to failure ratio would make much better reading.

The question that should be asked does not relate to intelligence, or number of books they are prepared to read or even the number of trading seminars they have signed up for, it is quite simply:

Is winning your driving passion?

if it is, then welcome on board. if it isn't then it is best to stay out.

Enjoy the week ahead.

htp80

Hi HTP80

you got that right my friend. Attitude is an all important ingrediant in the scheme of things when it comes right down to it. Good Post.

I am going to be 65 this month feeling good, thinking clearly, and working extra hard to help who ever i can thats willing to learn how to trade.

I'll be doing some serious articles in the weeks ahead about everything i have in my head, things that work, things that can make us all a few bucks.

I have many "little quotes" i use and learned over the years, one such quote is for traders to try and make a "days pay" using the least amount of trades and the least amount of shares to attain it.

Reading books is fine, it just never appealed to me, what did work was sitting next to the best scalp traders i could find for years till i fully understood what they were seeing. It may sound crazy but it worked for me as i'm a pattern recognition type trader.

I believe that patterns are repeatable and redundant enough to earn a nice living once you can "see them" on the charts. This is exactly what i am going to produce here for the T2Win group on some up coming KL articles.

This is a thought provoking discussion that needs further traders imput.

take good care all

 

[hungvir]

I look forward to reading your articles, Jerry. Thanks for your time!

Hung

 

[Jerry Olson]

I look forward to reading your articles, Jerry. Thanks for your time!

Hung

Hi Hungvir

I just hope it can help traders make more money using tried and true triggers that work for me and a lot of others.

I post these charts throughout the day everyday so everyone can see exactly what i am seeing and reacting too.

once i put this together and i am working it up now, then everyone will get an opportunity to try it out on paper or using 100 shares lot size to take the trade. All entires exits and stops have to be strictly adhered too in order to win without exceptions.

When we scalp for a living, our whole level of awarness becomes super sharp putting us in a manic mode if you will, with a heightened sense of self.

We react like a big cat pouncing on it's prey quickly deftly without one bit of emotion. This Laser platform i've been yakking about incessantly provides daytraders of all levels the chance to make a buck effortlessly.

It takes a host of things from great hardware, excellent high speed connections, great charting real time quote service a solid online broker set up etc etc.

you can not expect to make a living trading the markets as a pro without the proper tools and tactics to accomplish your goals.

we can talk about this in the weeks and months ahead. Traders need to step up to the plate and go for the gusto with a no holds barred attitude that pushes them to the upper limits of their skill levels.

What i call "my manic mode"............................ that is not spelled maniac either!

have to run later all

 

[zenith]

Im not sure if I agree with the 'survival of the fittest' stuff, but clearly most traders must fail because that is their purpose in the market: amateur traders are the poor sods that the pros fleece day in, day out to make money for institutions.

Why are there so many uninformed public losing money in the market? The media sucks them in.

 

[Pat494]

Im not sure if I agree with the 'survival of the fittest' stuff, but clearly most traders must fail because that is their purpose in the market: amateur traders are the poor sods that the pros fleece day in, day out to make money for institutions.

Why are there so many uninformed public losing money in the market? The media sucks them in.

In a word "GREED". The pot of gold at the end of the rainbow.
Many of the professionals work in groups, mostly above average IQ, on a large weekly salary, building on the efforts of the best and their own in a long timespan with large financial resources.
Consider the plight of the amateur -
harrassed by wives, kids bills etc.etc. to deliver, gambling with the housekeepings, on their own, only books and dodgy software to help, in a limited timespan before they are broke !
Almost a no contest but not quite.

 

[SOCRATES]

Yes, plus one little word....three letters...first letter E.....last letter O... middle letter G.

 

[crazy trader]

You couldn't be more correct. The other thing that I am finding is that listening to others is helpful. Listening to others and then fearing the system that you have tried and proven is a bad thing.

Many times the experience of others can create a fear in our trading techniques. This simple fear will cause you to avoid trades that you would make without the fear.

 

[SOCRATES]

Academic note:~

Yes, and even as early as 1666, when Joseph de La Vega wrote his book entitled "Confusion de Confusiones" based on his investigations into the mysteries of the workings of the Amsterdam Stock Exchange, already then the Aveztruzz was being catalogued and its behaviour described accurately, with commentaries.

 

[firewalker99]

You couldn't be more correct. The other thing that I am finding is that listening to others is helpful. Listening to others and then fearing the system that you have tried and proven is a bad thing.

Many times the experience of others can create a fear in our trading techniques. This simple fear will cause you to avoid trades that you would make without the fear.

Quite correct crazytrader. It is a good thing to question yourself from time to time, but only for the right reasons. Comments or suggestions from others can lead to doubt. Doubt can lead to fear. And scared trading is one thing we don't want to do.

 

[firewalker99]

Im not sure if I agree with the 'survival of the fittest' stuff, but clearly most traders must fail because that is their purpose in the market: amateur traders are the poor sods that the pros fleece day in, day out to make money for institutions.

Why are there so many uninformed public losing money in the market? The media sucks them in.

One of the best things I did was to stop reading the news. Of course I'm still aware that the DOW is at an all time high and I'm still interested in global economics. But it's unrelated to my trading. I couldn't care less if interested rates were doubled or unemployment rose by 20%. TA will show me what to do and when to act. News can be a catalysator for price to move, but for me never a reason to buy or sell.

 

[firewalker99]

Because most are not interested in learning... just too intested in a quick buck that never appears.

In fact, the worst thing that can happen to a new trader (and has happened to me too) was getting "lucky" and gaining some bucks without having any knowledge at all. I gained significantly from the start but suddenly I ran out of luck. The next thing that happened brought my account down, and almost took me with it.

 

[SOCRATES]

And Superfly has spotted it.

Well done.

 

[superfly]

Confusion de Confusiones

Socrates, thank you for this tip. I will certainly read it.

Academic note:~

Yes, and even as early as 1666, when Joseph de La Vega wrote his book entitled "Confusion de Confusiones" based on his investigations into the mysteries of the workings of the Amsterdam Stock Exchange, already then the Avestruzz was being catalogued and its behaviour described accurately, with commentaries.

Abstract



The Spanish wording in the title is borrowed from a book by Joseph de la Vega published in Amsterdam in 1688. The book consists of a series of dialogues between a philosopher, a merchant and a shareholder, and is usually recognised as being one of the first analytical attempts to describe the different kinds of financial operations taking place in Amsterdam at the end of the seventeenth century.

 

[superfly]

De la Vega (172) wrote,​

​

​

“The Exchange business is comparable to a game. Some of the players behave like princes and combine strength with tenderness and amiability with intelligence, but there are some participants who lose their reputation and others who lack devotion to their business even before play begins.​

http://www.sjsu.edu/stringham/Stringham.Amsterdam.pdf

 

[superfly]

attention, interest, decision, action

http://www.youtube.com/watch?v=TROhlThs9qY

 

[dc2000]

If you know the meaning then you already know the answer

 

[crazy trader]

Quite simply the rules of physics apply to the markets. Mass can neither be created nor destroyed. Meaning that the money in the market is not created but put their by someone, so anytime you gain money someone somewhere is losing money.

If you lose you are in the majority as those that win are more of the minority.

 

[henry766]

Not nescasseriley , only if equal number of shares are shorted as are long , (unlikely ).

 

[laptop1]

Why do so few succeed?


Because trading looks easy, but most end up