Why most newbie traders fail?

[oildaytrader]

Here's my two cents worth,....
90% of traders don't fail, everyone does,...it's just the 10% that have the tenacity to persevere through failure, and the others don't.
Everything and anything is possible, given enough time and learning! : )

Well said.spot on.

 

[Chartsy]

too focused on being right rather than making money, too focused on '100 pips a day' rather than '$1000 a day', try to 'predict' the market with 1 pip stops, not accepting a day's loss,ineffective money management, don't actually want to make money ; other motived deep underlying,undercapitalised and just impatient , gambling, not doing hard work and taking the easy way out by dossing about forums for a few months, checking some charts and deciding they have found a new method they may like.

 

[Chartsy]

3) no indicators , they are rubbish and cannot compare to price action. indicator traders rely on them too much.

HA ! Obviously personal opinion. Head and clouds....

actually , i thin kanother two reasons are:
1)plastered with hundreds of indicators and
2) trading entirely naked,with setups they don't understand and just taking a setup BECAUSE it's a setup

 

[meanreversion]

Main reason is wanting to be right, which leads to taking profits too quickly and running losses too long (can't admit to being wrong). Undercapitalisation, not having a plan and overtrading are also deleterious.

 

[fayalac]

It is hard to talk based on rough statistics.
90% fail?, why not 95% or 70%, nobody really knows the exact percentage of people who fail.
Now, what means fail?, into the very short time?, maybe we all do, into the middle and long therm?, many people is succesful.
What most newbies doesnt understand, and that provides them with a very good reason to fail into every time frame they want to, is that there is a certain set of rules which followed conciously can assure a statistical chance to be succesfull into the short, middle and long therm.
Many people gets scared when we talk about winning 8 - 9 %, or above, of our account daily, but they dont get scared, because they know its highly probable when someone say he lost that ammount.
As i said about rough statistics, each one´s method will dictate the probability to make an income, and that income will depend on the method itself, and other tools such as money and risk management as well.
These is a hard business, successfull people is highly skilled and trained and for those who doesnt have their intelligence, we still have the chance to work hard to find a method that fits our own personality. Its not a betting game, its a lot more complex than that.

 

[retirerich]

Instead of futures one can try their hand at futures trading like e-mini or mini s&P500. Here you can have a limited exposure and must follow the guidelines provided the broker.

I have recently started trading in futures and am positively surprised by the return generated

 

[meanreversion]

You're prepared to rely on someone else for your trading signals? Do you think that's a good idea?

Why did you imagine trading futures was easy anyway?

Try reading "Trade your way to financial freedom" by Van Tharp, it's an excellent book that every trader should read, preferably before committing any money.

 

[hasnain]

Henk,

I have had a look at the site and it seems pretty good for newbie traders who are still finding their way as well as experienced traders who do not have time to analyse the markets. I have set up my free trial and will report back. First impressions are good. I like the idea of them giving exact entries and exits and their risk management seems pretty sharp.

Thanks

 

[henkd22]

Thx for both of your replies. I will definately look into that book I mentioned.

And for trusting someones elses advice, My father always had a financial advisor doing his management for him, so i dont realy see your point there. The website seems quite open, trades are all displayed on the website.

 

[hasnain]

Hi guys just an update, i took the free trial today and was very impressed. These guys seem to know how to manage a trade with limited risk. I saw them make over $1000 today and their aim is only around $300daily. I looked at there trades for the last few days week and they are up over $3000. I will report back once my free trial is finished and i have gathered more data on trades.

They seem like nice honest guys who just trade when they see an opportunity. They communicated via audi every trade in advance so there was plenty of time to follow their trades. I only traded in sim and will continue to do so for the rest of the trial. First impressions very good. I will say though it is not a site really for education, but if you like to be spoon fed and make atleast $300 a day so far it looks good.

Will report back after free trial.

Hope this helps.

 

[Chartsy]

Something i like to do now is not to focus on just one pair but have loads of markets at your hand, thousands of stocks, commodities, pairs, indexes all sitting there so that you don't have to trade in a way that you're crap at. I used to think i was letting myself down, as a lot of the really good traders i know started off in one market, but end of the day it's trading in a way that suits!

so yeh , another reason is wanting to be like other people 'if they can do it, i can too' without thinking 'what am i actually good at?' and focusing on that

edit: for example today i've realised that no matter how hard i try and no matter how much i want to, i'm just plain and simple crap at day trading, my swing trading is much much better so i will focus on that!

 

[meanreversion]

Agree with that, you need to be honest with yourself as to your strengths and weaknesses. Do a SWOT chart (is that right?). I'm pony at day trading, so don't even try.

 

[TRADINGXYZ]

i agree with magten and i like the eckhardt quote by BSD...

 

[cm-phil]

I think most newbie traders come into the market when it is really good. They see their friends, neighbors all making money and think if they can do it, I can probably also.

Typically, the market will then take a turn for the worse in the form of a correction, and they get really scared so they sell everything as quickly as possible. Then the market climbs up again and they regain confidence and enter the market once again. The cycle continues.