i dont need any private information, did you find out why did you lose the money?
need to find for any recurring patterns for the failures?
people dont usually post the loses publicly
I am not losing trader but i suspect below from my own struggles and reading other peoples posts. No need for profile.
- Lack of edge. Biggest reason by far. By far
- Blaming loss to psych issues instead of 1
- Not doing enough and correct work. Not verifying that something works. Will never be able to trust a system and psych issues are given in tough phases.
- 3 + deploy large capital because why not. Short term profits will certainly lead to mistakes like this.
- 4 + trying to make it all back quickly. Yes you lost so much money and yes now magically you will make it all back quickly.
- Reading things that donāt work. This is tough one, everyone goes through with it as no one hands you the key.
- Unable to stick to a working system and switching systems when in DD. 3 is root cause
- Looking for holy grail. Want daily profits ( bloody hell ā¦ ), want salary. Want risk free high returns. Want multi bagger returns quickly.
- Sticking to something that does not work ( in general or for him/her) for way too long. Someone i knew went through this ( Al brooks). Tough as there is also 7. Only fix is 3 + diversify.
- Trading full time with small capital. Not compounding. Leaves you open to future uncertainty. Just because a system worked in past does not mean that it wont stop working in future. Donāt be a slave to the market. Technically, trader is still making money so not part of your question but i think this is a killer in long term for a full time trader.
- Taking too much risk.
- Real psych issues. I did not face these and have not seen a successful trader having to deal with this. Once 1 and 3 were done all issues were gone. We can still be uncomfortable, but that does not lead to mistakes. But i guess someone with real world psych issues might face them in trading too. Perhaps also for someone who trades manually and very frequently, scalpers etc. Thatās hard to do and perhaps this kind of stress is not good for health too. Obviously some will manage this so it will depend on person too. A helicopter pilot might have much easier time with fast actions in uncertain situations (ytc) ā¦
- Nonsense posted on twitter/youtube. Lamborghini photo wale traders, etc. This leads to faulty expectations from market.
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not losing doesnāt mean its winning. why people win is easy to document
why we lost is hard to codify, the impartial diagnosis.
well i may not be successful in finding the pattern, but let me try to find it.
for winners we have the Market Wizards by Jack Schwager. but do you think a losing person reading that book will make him a winner
I gave list of things that i think are reasons for why people lose, did i not ?
I wasnāt making money for many years too. Nobody starts winning immediately (and stays that way). Some of those reasons applied to me as well, and others you can just see. Anyway ā¦
- Another one - perhaps just as imp as 1st. Not understanding the game. Trading works in probabilistic way. You win some you lose some. Diff is what you make. Its hard to get into this mindset initially, and you donāt even know it. So you focus too much on the wrong things and over react to losing trades. It was a revelation to me to see the guy I learnt from struggle for many many trades. Perhaps more important than seeing people make money is to see them struggle too, people with decade + experience also have to live with draw downs. And thatās it from meā¦
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I understand the importance of learning from failures (of others & oneās own) but all that does, is introduce you to 100 ways to fail. I donāt think it does anything in the way of pointing you in the direction of success.
Success is simply doing the hundreds of things that seem logical to succeed till you eventually find the one that does. Luck plays a major role in that, success could be first card you draw or a card that is way down in the stack.
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Out of many, That is the only thing i faced hammered in my learning journey. Not accepting loss when your trade goes into loss. When traders loss, they donāt exit, rather they assume that price will reverse from next level.
Its not about price reverses after your defined sl level or not. Its all about capital preservation and risk management.
Its well said, in stock market, those not wins who knows how to win, actually those wins, who know where to accept loss.
Now that the voting is over, just want to clarify -
What does Yes mean?