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Why 99% of traders lose money

  • #21
  • Nov 17, 2017 5:00am Nov 17, 2017 5:00am
Quoting mlawson71
{quote} That's one of the main reasons, yes, but I think some people lose money despite actually being experienced. It happens. Their ego comes into play.
Actually traders lose money almost for the same reasons. Lacking live experience , emotions , poor MM , RM and much more. We have to come out from these if we want to reduce losses.
  • #22
  • Nov 17, 2017 5:23am Nov 17, 2017 5:23am
Actually loss occurs just because of lacking of experience.
It depends on the situation also. Successful traders also cannot avoid the losses.
So it’s a common issue.
  • #23
  • Nov 17, 2017 5:51am Nov 17, 2017 5:51am
Quoting hanover
Yet another thread on why traders lose. Here is a yet another list of reasons.
Hi David,

I have read many of your important postings. I have even collected them (tediously) as my personal reference.
I wish you could start condense them into a pdf files so that readers/ traders can easily collect.

Thank you.
  • #24
  • Nov 17, 2017 3:22pm Nov 17, 2017 3:22pm
Quoting MTaufiq
Hi David, I have read many of your important postings. I have even collected them (tediously) as my personal reference. I wish you could start condense them into a pdf files so that readers/ traders can easily collect. Thank you.
Thanks for your kind words, but I'm a programmer, not a pro trader. I merely post my opinions, right or wrong, just like everybody else.

I've written hundreds of posts over many years, and I have no idea which ones would best be collected, or how to easily find them.
  • #25
  • Nov 18, 2017 12:00am Nov 18, 2017 12:00am
The knowledge is what makes trader and the lack of knowledge is what makes the traders to lose it all.
  • #26
  • Nov 23, 2017 6:46am Nov 23, 2017 6:46am
Being 'over-emotional' is the reason. Euphoria/Despair needs to be controlled and limited. They cause over-confidence and fear respectively.

With over-confidence, your discretion becomes skewed and a set-up that you might ordinarily leave, is that riskier trade that you take.... and then, with fear, it works like this...

First set-up, you wait and watch. It goes on to be a winner. You gain confidence, even though you did not trade it. You miss the next one because you were too slow with your order, you went to the toilet, you made a cup of tea etc. Now determined, you take the third set-up which is a loser. Your fear returns and it is back to square one.

Rinse, Repeat.... (There will be the odd success along the way, just to keep you interested).

Trading is not about intelligence. It is about conquering and controlling those emotions. The calmer a person's character, the better a trader he/she is likely to become, or the less time is required to achieve it.
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
  • #27
  • Nov 23, 2017 6:55am Nov 23, 2017 6:55am
I would say bad Trade Managment is the main reason.
  • #28
  • Nov 23, 2017 10:00am Nov 23, 2017 10:00am
Quoting GodfatherSam
The knowledge is what makes trader and the lack of knowledge is what makes the traders to lose it all.
One may have a lot of theoretical knowledge and still be unable to apply it in practice because they are too anxious or too arrogant to have a sound jugdement, unfortunately. I don't think it's just about knowledge.
  • #29
  • Nov 23, 2017 4:08pm Nov 23, 2017 4:08pm
Quoting mlawson71
{quote} One may have a lot of theoretical knowledge and still be unable to apply it in practice because they are too anxious or too arrogant to have a sound jugdement, unfortunately. I don't think it's just about knowledge.
knowledge and practice goes hand in hand.
  • #30
  • Edited Nov 24, 2017 1:00am Nov 23, 2017 9:20pm | Edited Nov 24, 2017 1:00am
Hi guys,
First of all I want to mention that I don't sell anything, I just want your opinion about something.
I used some systems in the past but none showed profit or as much profit as I would like so I created my own a couple of weeks ago.
I use it for Eur/Usd only and 1H charts, I am identifying the start of swings and get in to catch maximum profit. The losses are not so frequent so I can risk 5% of my bankroll for each trade (stop loss, the majority of losing trades are much smaller since I adapt to the market conditions).
So far so good, I backtested it manually for 2016 and 2017, all months show a profit from 100 pips (not pippettes, real pips) to 1000 pips, I accumulated all pips and divided to number of months and it turns up an average months would be 545 pips.
545 pips per month with 5% risk can almost double your bankroll each month, about 90% increase month after month.
That means if I start with just $100 now after 1 year I will have $300.000.
Is that even possible? I can't believe my eyes because every serious article I have read states that 10% increase of your bankroll is very good per month and even year, everything else is trash or too risky. Then I go and backtest a couple more months and I have same results.
Is it possible that I am missing something or could this actually work?
I want to know what you think and thank you in advance if you decide to reply.
  • #31
  • Nov 24, 2017 4:04am Nov 24, 2017 4:04am
It is virtually impossible to 'identify the START of swings' and not have frequent losses. Sorry, it is a contradiction.

Trade your theory for 6 months (on demo if need be) and see what happens. If successful, switch live. If successful, welcome to unforetold riches.
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
  • #32
  • Nov 24, 2017 4:50am Nov 24, 2017 4:50am
Quoting marian27
Hi guys, First of all I want to mention that I don't sell anything, I just want your opinion about something. I used some systems in the past but none showed profit or as much profit as I would like so I created my own a couple of weeks ago. I use it for Eur/Usd only and 1H charts, I am identifying the start of swings and get in to catch maximum profit. The losses are not so frequent so I can risk 5% of my bankroll for each trade (stop loss, the majority of losing trades are much smaller since I adapt to the market conditions). So far so good, I...
everything is possible, just go for an extra to months, and your 100$ will pass the million mark!
totally realistic!


warning: sarcasm
there is always, always another trade!!
  • #33
  • Nov 24, 2017 5:56am Nov 24, 2017 5:56am
Quoting The Cableguy
It is virtually impossible to 'identify the START of swings' and not have frequent losses. Sorry, it is a contradiction. Trade your theory for 6 months (on demo if need be) and see what happens. If successful, switch live. If successful, welcome to unforetold riches.
How could it be impossible to identify it? if all the indicators show the signs that it will start I open the trade, if it is real I let it run. If not no problem, I close it with the smallest loss and wait for other signs. The wins are at least equal or greater in number than losses and the system wins more than it loses. The losses are there for sure, very frequent actually in some periods but I can overcome them easily if monitoring and cut them short. It's a dynamic system that adjusts to the market.

The problem is that I made my calculations on ALL the winnings and cutting short ALL losses. I will miss a lot if not half the opportunities while sleeping or doing something else. But I will try to catch as many as I can anyway. I made an indicator that announces me when the setup occurs and I can receive push notifications on my phone, in case if I hit stop loss for example then I can wake up and make a decision. People who just had a baby wake up frequently all night to take care of them, if this systems proves to be like I see now it will be my baby ) I will wake up all night for an year if needed.

I started with $100 today, a few hours ago but as you can see Eur/Usd has a few tricks in it's sleeve for us so I have 3 losses so far totaling $8 but no worries, soon enough there will be a deep dip on the chart and earn more than 8 bux, I am waiting for new concrete signs.

Quoting profitfarmer
everything is possible, just go for an extra to months, and your 100$ will pass the million mark!
totally realistic!
It would be stupid to stop otherwise.

Quoting profitfarmer
warning: sarcasm
No need for that. Thank you!
  • #34
  • Edited 7:34am Nov 24, 2017 7:19am | Edited 7:34am
I like trying to decipher what is a wind up and what is reality!)

You answered with part of the equation. Sure you can identify the start of a trend, but i said it is impossible to do so without suffering many losses in the process.

The minimum required to call a trend is HH/HL/HH (or vica versa). This is also an ABC corrective move. So is it a new trend? or is it corrective?

Is there Regular Divergence present? If so, will that only go on to form Hidden Divergence which will over-ride it?

The market has an answer for everything, that is why 99% lose.

Hey, if you genuinely believe that you have the system and experience, you go for it. Those 3 losers so far are just a blip, right? Your back-testing says so...
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
  • #35
  • Nov 24, 2017 7:42am Nov 24, 2017 7:42am
Quoting marian27
{quote} How could it be impossible to identify it? if all the indicators show the signs that it will start I open the trade, if it is real I let it run. If not no problem, I close it with the smallest loss and wait for other signs. The wins are at least equal or greater in number than losses and the system wins more than it loses. The losses are there for sure, very frequent actually in some periods but I can overcome them easily if monitoring and cut them short. It's a dynamic system that adjusts to the market. The problem is that I made my calculations...
i am all in from reversals.
but if you lost 8$ on 3 attempts, that means you havent risked your 5%/trade...ie. already not matching the backtest.

if one advise i would give, that being right on the general direction, and lose one's deposit can happen the same time, when risk is high.
lots of ppl lose their money like that, being under funded to start with.
with 100$ it is very easy to fail, even if you are right, just because a few pips 'noise' gets SL hit a couple times.

but it was suggested, go ahead, test it for a while live, and compare back your results to that of the backtest average result.
there is always, always another trade!!
  • #36
  • Edited 12:10pm Nov 24, 2017 11:55am | Edited 12:10pm
Quoting The Cableguy
Sure you can identify the start of a trend, but i said it is impossible to do so without suffering many losses in the process.
Not so many that they would put my bankroll in danger. I think the longest streak of losing trades was 5-6 consecutive in 26 months that I tested manually. And not all took the 5%, some were stopped early, some at half. Losses are quickly recovered.

Quoting The Cableguy
The minimum required to call a trend is HH/HL/HH (or vica versa). This is also an ABC corrective move. So is it a new trend? or is it corrective? Is there Regular Divergence present? If so, will that only go on to form Hidden Divergence which will over-ride it?
I am not familiar with any of those terms, sorry. I don't doubt that you are very knowledgeable but I honestly believe that it is possible to not see the forest for the trees. I mostly hate math but I am a creative person and I just tried various stuff until I saw how I can adjust my system to win most of the time.

Quoting The Cableguy
Those 3 losers so far are just a blip, right? Your back-testing says so...
You are correct sir. I entered at an unfortunate moment, it will pass. I actually recovered $5 already.

Quoting profitfarmer
but if you lost 8$ on 3 attempts, that means you havent risked your 5%/trade...ie. already not matching the backtest.
I did everything by the book and still lost $8, just a bad streak and my system will overcome it. Everything looks normal so far.
Actually I recovered $5 so I'm sitting on $97 now. I said I monitor the trades all the time and not all will lose 5%, some lose only 1% or less if the market conditions change and I close them. The stop loss is gets hit very rarely and the longest streak is 2 times in a row.
However I did a mistake and I pussied out after those 3 loses and the next trade I opened for half the stake and it was a winning trade. If I followed the rules I would have been in a small profit now. So I think this is the biggest danger, not following the system and going with your gut. I had a feeling that the Eur/Usd will not go that high so I was scared to launch another full Buy order like I should and I am in loss now.

Quoting profitfarmer
lots of ppl lose their money like that, being under funded to start with.
with 100$ it is very easy to fail, even if you are right, just because a few pips 'noise' gets SL hit a couple times.
I am determined to follow strict money management and if I do that it will take a long time to lose the whole bankroll.

Quoting profitfarmer
but it was suggested, go ahead, test it for a while live, and compare back your results to that of the backtest average result.
I will keep you posted. So if after a couple of months it works as expected I don't think it can be just dumb luck.

It sounds like a pipe dream I admit that is why I wanted to hear some points of view, I don't even dare to dream of results like I get in backtesting.
But if it's real then I will be very rich very soon and will be looking for an Ecn broker because I doubt they will want to deal with me if I milk them so hard.

I wanted to hear that something like this can be possible but i realize that if somebody holds a similar system they will never talk about it.
  • #37
  • Nov 24, 2017 2:57pm Nov 24, 2017 2:57pm
Quoting marian27
{quote} Not so many that they would put my bankroll in danger. I think the longest streak of losing trades was 5-6 consecutive in 26 months that I tested manually. And not all took the 5%, some were stopped early, some at half. Losses are quickly recovered. {quote} I am not familiar with any of those terms, sorry. I don't doubt that you are very knowledgeable but I honestly believe that it is possible to not see the forest for the trees. I mostly hate math but I am a creative person and I just tried various stuff until I saw how I can adjust my...
with really strict money management you can do wonders.
i personally think 100$ is too small, makes risk harder to size, and promotes some overtrading ( plus 5% a trade is large risk)...
but what i think and what you can do is different.

i surely wish you good luck to achieve your goals.
should you like, ForexFactory has an option to add and attach a Trade Explorer ( like i have) to your account, make it easy to keep track of your trades and progress.
i would be very happy to see you progress all the way to 300k, it would most certainly be a forum first ( such was only done yet here on fake broker accounts, lol).
there is always, always another trade!!
  • #38
  • Nov 25, 2017 12:30am Nov 25, 2017 12:30am
Quoting dkrock
If you looked at historical charts and use moving average(s) or any of their indicators, then you may not have the right picture. As price continues to move up and down, anything associated with a moving average will adjust. This is why people who claim indicators lag don't know what they are talking about. Anything mathematically aligned to a moving average that updates on every tick is constantly updating. What you see in "history" is a modified drawing that could be different than how it appeared at the time.
Hi dkrock, I know what you say. I studied the moving averages on 1min charts to see what's their deal. It would have been so good if they showed the whole story but even if they don't the good thing is that they adjust only for the current candle, once the candle closes what has been painted stays that way for eternity. I think it is impossible not to spot where the averages intersected for example, even if they separated a bit later you can imagine what happened actually specially if there is another sign confirming, like a parabolic Sar or rsi. I always take that in consideration when backtesting, I am honest to myself and I say ''yup, here looks like I would have hit the stop loss''.

Quoting dkrock
I recommend that if you are using moving averages and/or their indicators that you demo your trading plan with the candles removed from your chart.
Quoting dkrock
If you determine a consistent alignment, then you do not need candles, so you are not such an easy prey to that type of emotional manipulation.
I need the candles all the time, they are just as important for my system as any other indicator. I reenter the same trend after SL or TS has been hit based on what the candles are showing. If two indicators are confirming that the trend is still climbing but the candles start consecutively one under each other I wait for a strong favorable sign from them or the entire trend to change. Does it make sense?

Quoting dkrock
When you can trust your trading plan that much, you have a good chance of being successful. Just my thoughts. It is what I do. I don't know your trading plan, so I don't know if you can use my advice.
Your advice is very good, I didn't consider the news time so I don't know yet if it would make a difference. I will look on the charts today to see and it might be a good idea to stay away in those hours.

Quoting dkrock
Oh, I noticed you talked about sleeping. A time frame is just a time frame. They all draw the same patterns. They differ in range between high/low and the frequency of the signal. Once you know how to trade, and your system responds properly, you can probably trade any time frame, or for that matter, any market. Be careful with some markets though because they react too wildly to news.
I use only EUR/USD for now. Only one hour charts and sometimes it takes 15 or more hours, maybe even 40 until the trade hits the stop. SO it can happen at lunch or 3 in the morning very well. And most of the times I need to be there to make a new decision based on what happened otherwise I might miss an extremely good opportunity.



Quoting dkrock
If sleep is not that big of a deal, try the lower time frames. If sleep or other life is in your way, try the higher time frames.
I think I can manage waking up a couple times at night. I like the 1H time frame because it catches so much movement, so much more that 4H in the long run.
I wanted to see how an EA is programmed and make the whole thing run on autopilot but it would be impossible to add so many variables to it so a robot can't trade for me but i need to trade like a robot.


Quoting dkrock
Good Luck.
Thank you very much!

Have a wonderful weekend everyone!
  • #39
  • Nov 25, 2017 12:52am Nov 25, 2017 12:52am
Quoting profitfarmer
with really strict money management you can do wonders. i personally think 100$ is too small, makes risk harder to size, and promotes some overtrading ( plus 5% a trade is large risk)
I am aware that the risk should be 1-2% but if the system can handle 5% then I will be doing myself a disservice if I lower it because the growth will be slow as well.
I will probably lower it to 4% once the account is very big but not more.

Quoting profitfarmer
i surely wish you good luck to achieve your goals.
should you like, ForexFactory has an option to add and attach a Trade Explorer ( like i have) to your account, make it easy to keep track of your trades and progress.
Thank you and I will look into that.
  • #40
  • Nov 25, 2017 1:06am Nov 25, 2017 1:06am
This 99% thing is common everywhere,out of a 10 businesses only 3 make it past three years and out of the three if lucky only one will make it past ten years,only one athlete out of the millions gets to be usain bolt,out of the many politicians in any country only one gets to be president after every election and worse of all out of the 6 billion human beings none of us will escape death,the point is dont let the 99% scare u because it happens in all aspects of life.
100% KENYAN.
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