8 reasons traders fail + ways to solve them


8 reasons traders fail + ways to solve them

8 reasons traders fail + ways to solve them : Trading is a very risky business and a wide range of traders fail in their trades. Rolf, one of the famous traders, in an article, explains the 8 main reasons for the failure of traders. Here are eight reasons why.

1.Lack of trading schedule and order

Having a written trading plan is the first step in getting started; Something that more than 90% of traders may not consider. Decisions need to be taken out of the mind and brought to paper or screen. As long as you do not have a trading plan, your decisions can change at any time according to your feelings.

2.Having an incomplete trading plan

Not having a trading plan or having an incomplete trading plan are both unforgivable sins in the trading world. If your trading system (program) is flawed or you do not use a program at all, you can be sure that you will not be paid for it. You need to be completely transparent about everything you do in trading.

A trading system should not be used solely to determine entry points. An efficient trading system will tell you the following:

  • The time of entering a transaction; Includes detailed rules, tools used, market structure, timing, and more.
  • Your method for specifying (Stop-Loss); It includes choosing between point-based methods (specifying a specific price) and chart-based methods (for example, when going into a downtrend) and allocating capital for the days needed.
  • How to set goals for buying or selling; Includes how to determine risk rates and fixed rewards or use variable targets in transactions.
  • How to manage transactions
  • How to deal with market news (If a sudden bad news comes out, how will your program change?)
  • How to deal with correlated transactions (transactions that are correlated with other assets).
  • Your behavior in the face of situations that are recorded at the end of the week.
  • Time to reduce the amount of transactions.

This list goes on. You need to have a clear answer for each part of your trading work. Otherwise, you will not have the necessary confidence and trading will become very emotional and stressful for you. Also keep in mind that a good trading system may determine other things that are not covered in this article.

3.Improper risk management

Most traders either have inefficient risk management or do not use risk management at all.

The size of your position should be such that your capital increases as gradually as possible so as not to cause major trading breakdowns.

Position Size Calculators are one of the tools that can help you manage your risk.

4.Wrong expectations

Many people think that trading overnight makes them rich!
Many people think that trading overnight makes them rich!

What does a profitable deal mean to you? Have you ever thought about this?

If you make 1% profit every week, is the trade profitable for you or do you have to make 100% profit every month to call yourself a profitable trader? Traders always use the phrase “always profitable trades”, but 90% of them do not know what it means.

The question is, if you have not set your goal, how do you expect to achieve it?

By managing expectations and putting aside ideas like doubling your capital every few months, you see that profitable trading is not a complicated task either.

8 reasons traders fail + ways to solve them

5.Short-term mentality

If your goal is to become a long-term profitable trader and you want to stay successful in trading for decades, then you need to forget about the short-term mindset.

Forget gambling with your money. Forget about 200% annual profit. Forget buying a Ferrari in the next few years.

Once you get rid of the popular short-term goals you see on social media, you will be able to get your business up and running. You can then focus on more important tasks such as long-term progress and working on the trading plan and on yourself. In this case, you will no longer have to trade every day or every week. This is where trading success comes in.

Most traders say they want to trade for a lifetime, but then they do it as if tomorrow is their retirement day.

6.Low capital

learned about money
learned about money

It is better not to try to get rich with a capital of $ 200 or $ 500. This idea has never worked and will never work.

But keep in mind that even if you do not have a lot of start-up capital, you can still increase your chances of success by managing expectations and having a long-term trading mindset.

If your account balance is only a few hundred dollars, you should not focus on making a quick profit. You need to build a successful long-term trading record and put yourself in a position where your trades are always successful.

How much is a monthly profit of 1 to 1.5 percent available to you? Can you do it? It is probably easier to do this than to make a 100% profit in a few weeks, and after a while you will see that profitable trades and earning money are not far off.

8 reasons traders fail + ways to solve them

7.Ignoring past mistakes

Many of you do not remember your last 10 or 20 trades.

So how do you expect to become a better trader? If you can not learn from your past mistakes, you will never progress and you will repeat the same mistakes forever.

Having a record of transactions is vital for any trader, without exception.

8.Constant change of trading program (system)

The constant change of the trading system is a direct result of the previous seven mistakes and not trying to correct them.

When a trader is looking for multi-million dollar income, has no specific plans, has a short-term mindset and does not learn from past mistakes, he is always looking for the best possible systems and is constantly jumping from branch to branch. He keeps telling himself that this strategy is not good and does not work, and then he goes after the next system. He constantly hopes to find a way to make money directly for him. The problem is that trading is not like that.

Many people think that trading overnight makes them rich!
Many people think that trading overnight makes them rich!

Whenever you find yourself in a vicious cycle of frequent system changes, you need to look back and analyze your methods. With this analysis, you will find out where you went wrong and you need to change your method, and which of the previous seven mistakes you made.

8 reasons traders fail + ways to solve them


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