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The reason that new traders fail that doesn't involve psychology

BenNathanFX (BenNathanFX)
Apr 16 2015 at 10:28
137 posts
90% of traders fail... everyone knows it.... but WHY?
Most people put it down to psychology, or system chasing etc .... but I propose there's another reason, one that probably applies to most new traders:

FUNDAMENTALS....

Without Fundamentals you are gambling... trading on the CHANCE that a pattern if traded enough will eventually win....

With Fundamentals you are INVESTING.... there;s a big difference... sure you enter and exit markets technically as you need a consistent method for actually trading, BUT if you do so BASED on fundamentals when choosing a pair you will do far far better!

In fact ill make a controversial statenment:

You simply cant make a regular, long term, sustained profit from Forex without some basic fundamentals being applied to at least choosing your trading pairs and direction. Today's blog explores this statement in more detail: What do Fundamentals Mean to Trading, and WHY are they so VITAL?

In the blog I included a Youtube video that's shows you how and why the moves following last nights Aussie news were 100 pips stronger on the EURAUD compared to the AUDUSD....

Its entry level stuff that will make a big difference.

https://fxnewstrader.co.uk/blog/blog/what-do-fundamentals-mean-to-trading-and-why-are-they-so-vital

HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
spunta
Apr 17 2015 at 00:05
28 posts
BenNathanFTA posted:

Without Fundamentals you are gambling... trading on the CHANCE that a pattern if traded enough will eventually win....

I agree with your statement here - a pattern 'may' mean something but doesn't overide sentiment/news/fundamental changes.

Vitautas
Apr 17 2015 at 07:02
51 posts
If you trade on fundamentals, you trade on facts that are known to everybody. Why should this give you an edge in trading?

BenNathanFX (BenNathanFX)
Apr 17 2015 at 07:26
137 posts
If you were buying a horse to race, would you buy it for its looks or buy it based on its upbringing, bloodlines, genetics and breed quality?

Or buying a company - would you buy it based on its name , or its performance history and investigatory.

You won't find a top performing Wall Street trader buying into a stock or currency based purely on a chart pattern, they know why and what caused the pattern .

Basically all technical strategies will on many occasions go against the base fundamentals , so trading in line with fundamentals cuts these kind of losses out and greatly increases profitability. That's the edge

HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
davidcraigson
Apr 17 2015 at 20:17
67 posts
How the hell will you know if you are going against the fundamentals, if you don't know them first.

BenNathanFX (BenNathanFX)
Apr 18 2015 at 08:31
137 posts
There are plenty of things out there to help.
Bloomberg is a good source of free information to keep in touch.
Talking-Forex is decent as they give you daily market wraps.

I use a service called Ransquawk more than anything but they are pricey

HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
Forexmanager9 (Forexmanager9)
Apr 18 2015 at 19:46
29 posts
Well, could be one of the reason but certainily not the Major reason why traders fail.

CrazyTrader (CrazyTrader)
Apr 18 2015 at 22:07
1718 posts
Forexmanager9 posted:
Well, could be one of the reason but certainily not the Major reason why traders fail.


Right!

Here is the only reason:
https://chatwithtraders.com/ep-015-joel-kruger/



'Trades based on Technical analysis = Gambling, Trades based on Fundamental Analysis = Investing!'

Scalping: minutes to hours
Day trading: hours to days
Swing: days to weeks
Investing: months to years

each trading style will be suitable depending on personnalities. I know traders that scalp the trends (fundamental outlook) based on Technical Analysis, why would they be gamblers?

CrazyTrader (CrazyTrader)
Apr 18 2015 at 22:15
1718 posts
BenNathanFTA posted:
In the blog I included a Youtube video that's shows you how and why the moves following last nights Aussie news were 100 pips stronger on the EURAUD compared to the AUDUSD....


This is purely technical.... It's called Relative Force. You can checkout any news, EURAUD & GBPAUD will always move more than AUDUSD.

100% of time.

Forexmanager9 (Forexmanager9)
Apr 19 2015 at 14:49
29 posts
CrazyTrader posted:
Forexmanager9 posted:
Well, could be one of the reason but certainily not the Major reason why traders fail.


Right!

Here is the only reason:
https://chatwithtraders.com/ep-015-joel-kruger/



'Trades based on Technical analysis = Gambling, Trades based on Fundamental Analysis = Investing!'

Scalping: minutes to hours
Day trading: hours to days
Swing: days to weeks
Investing: months to years

each trading style will be suitable depending on personnalities. I know traders that scalp the trends (fundamental outlook) based on Technical Analysis, why would they be gamblers?


There can NEVER be JUST ONE REASON why '90%' traders fail bcoz those 90% includes thousands or possibly few million traders around the world. Everyone has different mindset and so does different trading style. A losing factor for few traders may not necessarily be the same losing factor for other traders.

Some lose bcoz of high leverage and at the same time there are traders who win using high leverage bcoz they know how to CORRECTLY and EFFECTIVELY use it. Losing Factorsssss purely differs from trader to trader.

So just wake to the fact that THERE CAN NEVER BE ONE LOSING FACTOR though there can be one major factor.

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