Three Reasons Why Most Traders Fail
Three Reasons Why Most Traders Fail
Hello traders, I'm back with another educational post after receiving a lot of positive feedback. Today I'm going to break down three reasons why most traders fail!
Traders Fail?!
Yes most do, it is believed over 90% of new traders fail (this is an ongoing debate) but why is that? I personally believe it comes down to these three reasons.
1. Trading without a plan
The very first step in achieving success is to create and follow a trading plan , one that is specific to your personality, lifestyle and goals.
…BUT
Many new traders try to rush the process and simply do not plan for success.
“If you fail to plan, you are planning to fail”. - Benjamin Franklin
A successful trader works within a well-structured plan, just like a business. Every plan should include trading related goals, a trading strategy and risk management rules.
You need to be extremely disciplined when trading and follow your trading plan down to a T.
2. Emotionally Dictated Trading
As you may know 90% of trading is purely psychological and I firmly believe this is the main reason why so many traders fail.
Allowing adrenaline, fear, elation or greed to compromise their analytical ability.
Traders who make emotional based decisions show indecisiveness, close positions too early and do not follow their trading plan ... *FACE PALM*
Experiencing a consecutive series of losing positions will test your patience and confidence.
Many traders will never overcome their inherent emotional biases, therefor you should seek to understand the range of emotions you may experience as an investor and how it affects your interactions within the market.
You can learn what emotions you may face by checking out my idea "The 14 Stages of Investor Emotions".
3. Over Sizing Positions
Traders should put as much focus on risk and money management as they do on developing strategy.
Over sizing positions is nothing new, I see it all of the time with new and amateur traders. They cannot help themselves and want to trade big, they want the lottery win!
...BUT
As you all know seeking out a lottery win in the forex market ends in disaster, accounts end up blown and dreams shattered. At this point many individuals give up and decide trading isn't for them or it doesn't work.
The most effective way to deal with this problem is to lower the leverage and risk a maximum of 2% per trade.
I am available via private message for any questions you may have.
Here's to your success!!!
Hello traders, I'm back with another educational post after receiving a lot of positive feedback. Today I'm going to break down three reasons why most traders fail!
Traders Fail?!
Yes most do, it is believed over 90% of new traders fail (this is an ongoing debate) but why is that? I personally believe it comes down to these three reasons.
1. Trading without a plan
The very first step in achieving success is to create and follow a trading plan , one that is specific to your personality, lifestyle and goals.
…BUT
Many new traders try to rush the process and simply do not plan for success.
“If you fail to plan, you are planning to fail”. - Benjamin Franklin
A successful trader works within a well-structured plan, just like a business. Every plan should include trading related goals, a trading strategy and risk management rules.
You need to be extremely disciplined when trading and follow your trading plan down to a T.
2. Emotionally Dictated Trading
As you may know 90% of trading is purely psychological and I firmly believe this is the main reason why so many traders fail.
Allowing adrenaline, fear, elation or greed to compromise their analytical ability.
Traders who make emotional based decisions show indecisiveness, close positions too early and do not follow their trading plan ... *FACE PALM*
Experiencing a consecutive series of losing positions will test your patience and confidence.
Many traders will never overcome their inherent emotional biases, therefor you should seek to understand the range of emotions you may experience as an investor and how it affects your interactions within the market.
You can learn what emotions you may face by checking out my idea "The 14 Stages of Investor Emotions".
3. Over Sizing Positions
Traders should put as much focus on risk and money management as they do on developing strategy.
Over sizing positions is nothing new, I see it all of the time with new and amateur traders. They cannot help themselves and want to trade big, they want the lottery win!
...BUT
As you all know seeking out a lottery win in the forex market ends in disaster, accounts end up blown and dreams shattered. At this point many individuals give up and decide trading isn't for them or it doesn't work.
The most effective way to deal with this problem is to lower the leverage and risk a maximum of 2% per trade.
I am available via private message for any questions you may have.
Here's to your success!!!
📈 Master the Art and Science of Trading: sixfigurecapital.com
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