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Why 90% of retail traders fail...

GremlinCCS
May 21 2014 at 15:06
4 posts
I Need to agree with Bob and Adam here.

I'm new to the trades, I've been interested and wanting to trade for years now. As a man with little to no extra spare cash to use to trade I were stuck in the same loop. I bought expensive software and it took me 4 years to pay it down each month just to never using it and I probability never will. After spending some money on binary and lost a few bucks there I stumbled across MT4 and opened my eyes to the Forex market and I must say I'm so glad I did.

Finally I have my foot in and thus far I can't Complain and I really Really hope that I can stay that way.

Number 1 will be Greed. The want for more, faster and faster.... With all my previous fails I have adapted to play safe and grow slow but still with a steady and good growth, a growth with what I'm happy with. I know others that are also new traders that have the greed problem, Playing more than they should for the size of the account for a faster growth, but with that comes more losses and bigger losses.

Emotions, I'll still call this a problem although Bob disagree. The emotions for me are more that I can't really afford to lose the trades as the account are still small and I don't have more money to put into it. Thus losses are very emotional for me, If you can afford the size loss that's it would be fine and much less emotional, I feel in the end of the day the emotion are worse to those that can't really afford playing with the money that they are playing with.


I'm using EA's, I use them as I don't have time to keep an eye on the market the whole day around. The EA's give me the freedom to go about the day and knowing something is happening and I'm making some money today. They are not bullet proof and they do get losses. But that's part of the trading game as long as your profits are more than your losses all are good.

EA's does not take the emotion away as you will still log in to see whats happening and things does not always go as planned or hopped and that's where it all goes down the drain again. I do not believe to set up an EA and forget about it. I monitor mine at least twice a day but it's only 5 mins and I'm done. There's many days I want to intervene but I have got myself to leave it alone.


The most important part for me are to choice your game and stick with it.

Choice your percentage to play with - keep it as low as possible, I'm playing with 2% per currency pair on my one account and I feel safe thus far with it and I'm happy with the growth I have thus far - 44% are more than an acceptable for me. Account were started the beginning of the month.

Set your TP and SL and stick to it. I set my Take profit to 25% as that's more than enough for me. Stop Loss I have a bit high at this stage and I'm sure its gona bite me in the ass one day but I can't really seem to get to a point to choice the correct size for me. Currently running on 360pips and I know that's a lot but I haven't had any losses thus far that ever reached its stop loss.

Also Important for me are a trailing stop loss. It works like a charm and I'm in love with it. Yes some times it can cut your profits but it has saved me more than cut my profits.


Live life as its meant to be lived.Free....
ForexAssistant (ForexAssistant)
May 22 2014 at 15:54
465 posts
Gremlin; 'I'm in love with it.'

Yes, that was the term that I was going to use when I read your last post.

Love is an emotion that doesn't play well with trading. There were some trader rules going around at one time, I think 'never fall in love with your trades' was number 3. The market changes from time to time. Watch your system but don't put all of your faith in it. All that you said makes perfect sense, just remember the other rules. 'Diversify often'.

As soon as it's financially feasible, find a second, third and fourth robot that you feel comfortable with. Four different types of EA will give an added safety margin that can not be quantified. Also use more than one broker with accounts in more than one currency. I realize that funds are limited but playing it safe will mean that someday the ability will be there when the funds are available.

Now if your trying to sell that program that you write so affectionately about, fine, talk it up, but if not, watch how much affection you give to it. Trading systems will leave you busted faster than an unfaithful wife. It's just a tool. Nothing more.

Trader rule #1 'Never trade with the bread money'. If you got little to work with, start a home business and let that fund your retirement account. You have something that someone else needs, maybe information, maybe time? Use what you have and leverage it to make more. Then don't let anyone else know what you are doing until it's done or someone will try to screw it up for you. Remember, the higher the profit, the greater the risk, not 100% true. But set a target, not for profit, but for safety. That's the difference between investing and gambling.

Good Luck.

Bob

 

where research touches lives.
Disgruntled
Jun 10 2014 at 07:01
1 posts
Just makw sure that no-one uses Light Peak Capital for pension transfers. I was approached by a firm who could transfer pensions into a FX fund and I would get 2% per month return, so I let them transfer my pension. Now it appears that without good reason Light Peak Capital have refused to take the business from a company called PMC ( premier market consultants Ltd). So, I now believe millions of peoples pension pots are tied up with no-where to go. Anyone know this PMC company or Light Peak Capital? Seems to be one big scam. It seems LPA are an appointed rep of a bigger company Kession. Can the FCA do anything about this?

ForexAssistant (ForexAssistant)
Jun 10 2014 at 17:43
465 posts
Ah, disgruntled, if only you could have joined us before you took that trade. By the way, thank you for the heads up on that company but we are traders here and our whole premise is to by pass the middlemen. However, if we did like the profits over risk and we wanted to get in on whatever they were doing, we would probably not have gone over 5% of the pension fund. This is what we call money management or risk management if you prefer but it is just part of what we do.

You can't change what was, just pick up the pieces and don't invest in anything until you have had a chance to learn about that market and then direct your own investments, you just learned that the one person that you can trust is you. Don't make the same mistake again and you're well on you way to a successful retirement program.

And by-the-way welcome to the forum.

Bob


where research touches lives.
johannfly
Jun 12 2014 at 13:39
6 posts
je pense il y a trop de blabla
Rentre dans la pratique, toi immense soutien à la lueur de je sais pas qui

hungryhound (hungryhound)
Jun 14 2014 at 13:47
4 posts
I can find no statistics that support the statement that 90% or more people loose their money trading Forex.
The numbers reported by the brokers on a monthly basis tell a different story.
Depending on the broker the stats show that only 60 to 75% of customers accounts loose money on a monthly basis.

Check out these links:
https://trading-gurus.com/fxcm-release-extra-forex-trader-profitability-statistics/
https://www.cftc.gov/MarketReports/FinancialDataforFCMs/index.htm

There are a number of other links that show the information in a clearer format but I cannot find them at the moment.

IB has the lowest rate and it would suggest that this is because of their client base. While FXCM has among the highest.

Is the myth promoted because those that are trading successfully like to think that they belong to a exclusive club, are better than the other 90% ?

It is clear however that education, money management and overcoming greed is the major problem to be overcome if one wants to become profitable.

ForexAssistant (ForexAssistant)
Jun 15 2014 at 18:53
465 posts
Maybe I can help out here Brian, first the failure rate is down to about 80% now, the 90% was true a few years back. However, the data about how many trades were lost compared to the total trades doesn't tell you about how many traders quit trading because of their losses. If someone is profitable for 6 months then gets wiped out in one and he quits, this person goes into the failure folder though he was profitable 85% of the time.

Maybe it would help if we said that we have a high attrition rate, somewhere around 80% although failure is the correct analytical term.

Bob

where research touches lives.
Gabriel Urse
Pureprofitfx
Jun 16 2014 at 06:50
38 posts
The beginners are too naive and they do not have self control and money management. They think they can make millions of USD overnight with thousands USD. They belive so because they make demo money first.
It took me 3 years to understand twoi important things, money management and emotional management. I am doing well, I have the neccesary patience and most important I think on long term, at least a year.
I trade daily and make aprox. 20% monthly profit with 20% risk.

hungryhound (hungryhound)
Jun 16 2014 at 06:58
4 posts
I suspect that you are right Bob because the big retail Forex companies, have gone to some lengths to ensure that their customers are able to trade. It is not in their interest to see their customers wiped out as their major income comes from commissions from trading.

jotekfinance
Jun 17 2014 at 06:51
138 posts
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