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

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

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.

If you trade on fundamentals, you trade on facts that are known to everybody. Why should this give you an edge in trading?

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

How the hell will you know if you are going against the fundamentals, if you don't know them first.

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

Well, could be one of the reason but certainily not the Major reason why traders fail.

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?

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.

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.

You can use caps if you want lol.

You guys are always saying things without any proofs.

Show me any live account with leverage below 1:10 that fails... then I may think leverage isn't the only one reason. (Yes I may think because 1;10 it's still a leverage!!!

I can also recommend RANSQUAWK here, using it with great success you just get instant news before anyone else so even if you are the best technical trader there is you still can make more money if you know what the big guys and they all use Bloomberg, do.

One good example was the surprise cut from Riksbank. The guy at Ransquawk was shouting in the mic and in 3 secs I had sold SEK for a huge profit just at the begin of the spike ...

I think the leverage is just a fake objection and with 1:10 leverage it can be good, but also bad for beginners😎

FxProfit1 posted:
I can also recommend RANSQUAWK here, using it with great success you just get instant news before anyone else so even if you are the best technical trader there is you still can make more money if you know what the big guys and they all use Bloomberg, do.

One good example was the surprise cut from Riksbank. The guy at Ransquawk was shouting in the mic and in 3 secs I had sold SEK for a huge profit just at the begin of the spike ...

I second this - i use RS to build my fundamental picture. I agree with this whole statement actually - nicely put indeed

How long do you wait to act on or let a recent news article that is relevant to your trade affect your position?

The answer to this question is not relevant for your outcome or profit. It depends on the volatility, impact of the news, type of trade and so on.

Some interesting views here...

I always thought that the primary reason most traders (the 90%) fail is simply due to human emotions like Fear (too scared to enter a trade), Greed (wanting more profit or holding on to losing trades), Doubt (exiting too soon after entering), Anger/Revenge (revenge trading out of anger after losses), hope (holding onto loosing trades hoping the market will turn), incompetence (not knowing what you are doing due to a lack of training and experience).... etc.

I am a technical trader, but I do believe that fundamentals play a part in what drives the markets. So it makes sense to keep tabs on fundamentals so that you can determine if there will be follow-through after that 'break' you are waiting for. But I must admit, I don't place a huge emphasis on fundamentals by itself. Now don't get me wrong, I am not an 'indicator-trader' or 'systems-trader'). Tried them and found them to be rubbish in itself. I use old-school Price-action, Support & Resistance and Fib-levels to trade, and use fundamentals as a guideline to determine the bias and direction - the 'emotion' of the market participants.

So far my simple method has served me well. I am not going to be a millionaire overnight, but I sure am slowly working towards it.

So my point simply is this. No matter what you trade (Forex, Stocks, Options... etc.) or how you trade (manual trader, automated trading, investing, etc.), human emotion is still the basic force that drives our trading decisions. Oh and please don't start telling me EA traders don't feel emotion.... try running your EA on a live account and then tell me you don't still feel fear, greed, doubt or any of the usual emotions... been there, done that.... still emotions. Learn how to control your trading emotions, and you will soon become profitable....

Just my opinion...

JacoAF posted:
try running your EA on a live account and then tell me you don't still feel fear, greed, doubt or any of the usual emotions... been there, done that.... still emotions. Learn how to control your trading emotions, and you will soon become profitable....

Basically if you keep feeling emotions while account is run by EA... that means you are staring at screen. EA is supposed to run by itself so why don't you stop to look at the account? So if you are confident with your EA, there is no need to look at open trades every 5 minutes... therefore, EA avoids emotions only if it is well used.

It's always good to read:

https://www.tradeciety.com/how-to-deal-with-emotions-in-trading-ask-experts/