The weakest link to any trading strategy is the trader that is executing it. It is usually the mental and emotional errors of the trader that cause 90% of traders to lose money. Trading success is determined more by the mindset of the trader, than their skills with math, economics, or macro knowledge.
- The ego takes over the trader and being right becomes the #1 priority. This causes the trader not to take losses because they don’t want to be proven wrong.
- Greed causes traders to trade too big because they want to make a huge amount of money in one trade.
- Fear causes a trader to exit to early with a very small profit because they are afraid it will disappear.
- Discouragement causes a trader to quit before they have given themselves or their systems enough time to win.
- Coat tailing is when a trader follows a guru’s trades instead of learning to trade correctly themselves.
- Style drift is when a trader changes their method instead of sticking to it and letting it play out when the right market environment emerges.
- Arrogance leads a trader to trade too big and take on too much risk, this usually happens after a big winning streak or outsized win.
- Hope is when stop losses are replaced with prayer.
- Boredom is a dangerous time where a trader cares more about active trading than making money.
- Desperation is a dangerous mental state that leads a trader to make a “Hail Mary Trade”, this usually happens when the trader is in a deep draw down and tries to get back to even in one big ill advise low probability trade.
Trading more than anything is a mind game. If you want to master trading then first master your own mind.
Lost 7000 on silver because I thought it would go back up overnight. Demo mode, fake money. Real lesson.
That’s a valuable lesson – if you can remember. Too often I forget the pain and get caught up in the excitement which leads to hope which leads to loss. Good luck to you. Let’s all learn from each others’ mistakes
I’ve read a lot about Forex, but I’ve never seen a proven pablifrtoe forex strategy, despite the claims of some scam web sites.Playing Forex can appear alluring, but the majority of people who try it lose money. All you have to do is do a web search on the words Forex and lose to see this is the consensus.Forex is what we call a zero sum game. You are making a bet with someone else about whether a currency will rise or fall. For every winner there has to be a loser. If you are smarter than the average player, you may make money. If you are dumber than the average player, you are likely to lose money. Most of the people making the bets in Forex are highly trained professionals at banks and other institutions. You are unlikely to beat them at this game.Actually Forex is not quite a zero sum game. It’s a slightly negative sum game as the Forex broker takes a small percentage each time in the spread. It’s a small amount but over a hundred trades, it ends up being a considerable amount of money. So the average player is likely to lose money, and remember the average player is a highly trained professional and probably smarter than you.There is a lot of luck in Forex, and if you play it, you will have some periods of time where you make money. This is usually because you are having a lucky streak, not because you have suddenly become an expert Forex player. However, most people are unwilling to admit their success is due to luck. They become convinced they have a system that works, and lose a lot of money trying to refine it.Further complicating the problem is the large number of Forex scams on the internet. Most Forex websites are of questionable honesty. You will find many people on the Internet that claim they made a lot of money using Forex. They are usually liars trying to make money. They will say: Go to Forexcrap,com/q2347. The q2347 is a signal to the Forexcrap site that you are being referred to them by q2347. If they sell something to you, q2347 gets a kickback. These coded signals can be hidden by different methods in the link. Other people will refer you to their own private website or blog for the purpose of trying to get money off you. Also there are a good number of trolls out there that like to pretend they are successful forex traders just for the fun of it.I would recommend not trying to do Forex at all, unless you are a trained professional. It’s like playing poker with people better than you, with the house constantly taking a small percentage from the pot.