Reblog: 20 Reasons Why 90% of New Traders Don’t Make It


  1. They risk too much to try to make so little.
  2. They trade with the probabilities against them.
  3. They think trading is easy money.
  4. Instead of focusing on learning how to trade they focus on getting rich.
  5. They blow up due to improper position sizing.
  6. With no understanding of the mathematical risk of ruin they are doomed after the first long string of losing trades.
  7. Blindly following a guru that leads them down the road of destruction.
  8. They don’t do their homework.
  9. They trade opinions not robust systems.
  10. They go looking for ‘trades’ instead of a methodology.
  11. They have no trading plan.
  12. They attempt to piggy back on the trades another trader but don’t understand the risks.
  13. Most new traders quit when they realized how much work is involved in trading successfully.
  14. Most traders quit when they learn how many losing trades they will have to have to get to the winners.
  15. New traders quit if they do not have a passion for trading itself.
  16. Many new traders will give up the moment they realize that trading does not have guaranteed income, you are an entrepreneur.
  17. They are not willing to pay the tuition to learn to trade in time, study, and losing trades.
  18. They are crushed by the learning curve that they do not work hard enough to get through.
  19. We lose a lot of new traders when they realize that trading is actually harder than their job.
  20. The traders that don’t make it quit when they were tired, frustrated, and stressed out, the winning traders quit after they had figured trading out.

The original article appears on newtraderu.com and is penned by Steve Burns. It can be accessed here.


Reblog: Why you shouldn’t try to trade like George Soros


George Soros, founder of Soros Fund Management LLC

 

Traders tend to be overconfident and discount what they don’t know about the market and individual securities. They see patterns instead of random noise. And they have a hard time admitting their losses and focus too much on gains.

In summarizing the science of behavioral finance, Statman says we’re pretty much hard-wired to consistently make these mistakes — and lose money. Since we tend to think of ourselves as better than average on most everything from driving to investing, it clouds our rational judgment. A body of research has found this to be particularly true when it comes to amateur stock traders.

Statman said that average returns of frequent traders “lag those of infrequent traders and the average returns of infrequent traders lag average returns of investors who abstain from trading.”

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Reblog: How To Trade Or Invest


If you are confused about how to trade / invest when you have an opinion or follow one then you do need to get yourself a lesson in trend following. Elliott Wave analysis is meant for market forecasting but actual trades have to be taken based on classic technical tools that give you levels to manage a trade. It is my belief in this process that I do not give calls or tips. I do the difficult part of taking a view and take the flak for it when wrong.

However to successfully make money you will need to add Position sizing to either your investment decisions or trading decisions so that you can minimise losses and maximise gains. So I would expect you to learn some of that. In today’s note, I will give you a head start on this.

If you do not know how to trade at all then you first need a lesson in trend trading however if you want to know which trend to trade you have come to the right place. Learning to trade involves knowing.

1. How to buy/Sell
2. Time to monitor trades, to get out of losing trades
3. Understand support resistance

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