Why do many traders lose? - page 9
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We should think separate for individual trading areas. In each of them are key characteristics of fail. For example:
Discretionary trading:
Mechanical (Algo) trading:
- Lack of good tools
- Lack of good research, process and approach
- Lack of good plan (planning, risk management...)
Sure, small capital, big expectations etc. are the same for both groups. But everyone should think about his/her style of trading and what is dangerous for him.In my opinion, they can't know how to trade without trading.
In my opinion, they can't know how to trade without trading.
Why do many traders lose?
In my opinion, reasons are:
- Not manage risk
- Not pay attention to important news
- Not follow the market
I think you covered almost everything. Basically, lack of trading skills, lack of money management and lack of self-emotional-control. Sometimes stupidity, buying holly grail EAs and hoping they'll get rich fast, but that derives from the same lack of trading skills and emotions (ie greed, in this case).
My explanation:
- Not knowing to spot and follow the trend;
- Not knowing when to enter a trade (ex. buy at HH instead of deeps);
- Not being able to manage a losing trade - read hedging. If you can do it, you'll not lose. If you cannot, you will have to accept the loss (stoploss) from the beginning;
- Not being able to manage a winning trade - exit to fast by setting a fixed TP instead of exiting when the price reverses OR exit to late, after the price reversed against them while they're still hoping (and praying) that the price will resume.