Why do we lose so consistently?

[HannesJoubert]

Hi there guys.

A question to ponder, and any replies are welcome.

If we can both buy and sell, sometimes at the same time, across so many different markets, why do we lose our shirts so consistently?

What is the overwhelming reason for this?

Is it to much choice ito markets?

Is it overleverage?

Is it overtrading?

Is it unrealistic expectations?

Is it lack of knowledge?

Is it inconsistent trading (i.e. not trading every day, no routine)

Or is it all the fault of the criminals, big players etc?

I seem to think that we (or myself) as traders have to take a deep look within, and I am feeling that we would find the answer in the first 5 questions...

I mean we all hear of the adage that you could put two traders, that know how to trade next to each other, on the same instrument, at the same time, with the same lot size (i.e. all things equal) but one buys and the other sells, both will end up making a profit. Or, put two noobs next to each other, both with proven systems, and they both end up losing money...

It seems to me then that the answer to the never ending trading question lies not in the system but rather in the money and trade management.

If that is indeed the case, how do we sort that out then? Where can we learn that? I see literally nothing on that on the web... Because if we can figure that out, then being profitable, despite your system is no longer an issue...

Whadday the rest of you think?

H

:hi:

[HannesJoubert]

The underlying question I guess, taking the above into account, is how would / should we go about managing a losing position to our benefit?

We can use a SL, yes, but then we are already on the back foot...giving our money away, and ending up with less room to maneuver in upcoming trades anyway...

Is there not a way to fight our way out of a losing trade? I have read of many folks (including here on this forum) that have been able to do this on a consistent basis.

So, there must be something to it, a way to do it.

Put your fingers in your skulls and stir your brains and let's see where we end up...

H

:hi:

[jago25]

Psychology has to be the biggest factor.

TV, media, childhoods are filled with messages about money. Maybe it's evil to be rich? Maybe it's wrong to be successful? Maybe you don't deserve it and you're not worthy?

I know I've lost a lot of money due to this. And gained alot possibly. I think I have a view of myself as having a net worth of some kind - I don't view myself as a millionaire, so I'm not... yet...

Need t get over this because until you do your mind is always going to find a way to mess things up.

For example, today I found I had entred a 1lot trade instead of 0.01 test trade... turns out it was in my favour and I had my biggest win. But if you're thinking negative this sort of thing can cause big mess ups.

For this reason I would prefer to be working in a small team, checking each others trades. That's why I'm subscribed to the 10.9 daily trades thread. Whenever I get a notification of reply in this thread in my email I rush to see what's there... and find it's gone offtopic to curry!

[garyfritz]

If we can both buy and sell, sometimes at the same time, across so many different markets, why do we lose our shirts so consistently?

If you got on the field with Manchester U, or played a round with Tiger Woods, would you naturally expect to win?

No? Then why are you surprised when you go up against professional full-time traders and lose?

This is a very hard game. It takes a lot of work and dedication to master it. Fortunately it's possible to win little bits along the way, or at least limit your losses while you learn. But be very sure it DOES take work and dedication. It's not something you can play at when you're bored and expect to win.

[martes]

I think the most common mistake with newbies or freshly new traders are being impatient and over trading. other reasons maybe lack of knowledge or treating trading as gambling!

[genryk]

It's how market works. Along with sad frustrating stories, there are miracles how some sods made 100K from 1K and similar. As you see balance is punctually kept.

[Creator]

Statisticaly, all traders taken together should win-lose proportionally, money is not created out of nothing.
Now, when you put pro traders (big banks and trading floors) against home traders, you get an idea to whom more money outflows.
Next, when you understand that ALL BROKERS without exclusions, with respectful exceptions of pure technical service providers - prime brokers (and you will never see prime broker advertising) are more or less sophisticated bucket shops that exist to make money of commissions, spreads and to degree losses of FX mania victims, than chances of home trader in long run are quite against him.
In between, lucky one will make some money, which may be easy lost later with same trading habits, MM and style.
Unlucky one will lose faster.
Statistically, long-term winners are well equipped, well informed and big budget pro traders, together with infrastructure providers and finally so called forex brokers, who are let me be clear again just kind of sophisticated advertising to get traders money in more-less formally proper way.
If we are open and honest, the best advice for anyone who doesn't have really excessive money (read=money he can simply throw out from the window and still remain financial and psychologically sound) to forget FX market in way it typically works.
One alternative (not easy to do) is to find way toward real pro trader and leave him to manage investment money for commission. Finding real pro people ready to that may be extremelly hard task for anyone outside pro trading environment, but theoretically possible.
I can witness that pro trader, which is really excellent one may achieve reliable and long-lasting profits almost continuously. They lough, if anyone expect to make 10M out of 1M in several months.
For scam purposes, we can see those '1k to 100.000k in xy weeks' video stories, but what we don't see are hundreds of failures.
Hoping to be consistently profitable in FX without very good budget, real prime bank account with access to direct forex market (real forex market doesn't know currency pairs, you either have one or another currency on the account) is more-less dreaming and gambling combined in favor of brokers and pro traders.
Now, go to work and stop dreaming

[hhamilton12]

I guess if you didn't do your research well, you're bound to lose, so make use of available materials and study them well. Look for trends, sometimes, it is on a roll . Don't guess blindly, always make an intelligent guess.

[Jeuro]

Statisticaly, all traders taken together should win-lose proportionally, money is not created out of nothing.

Hi Creator.
Yes you are right that money is not created out of noting (even that some will argue that fiat money is made out of nothing. But that is a different topic) . Yes, Forex it is zero sum, but absolutely nothing to do with win-lose statistics.

Zero sum means that if you want to buy 10 000 euros , someone must sell those 10 000 euros at the price you want. Seller could be an speculator like you, that made a few pips and decided to sell them with profit , or a non-speculator that is selling/exchanging to acquire merchandise or whathaveyou.

If later on you sell those 10 000 euros, someone needs to buy them .. and again, the buyer could be an speculator or a non speculator. Non-speculators convert their purchases outside the forex market. So no win or lose there.

Only speculators can win or lose.. but if the Euro keeps going up, the one that sold you the euros made money, you made money and the one that purchased from you made money. So. no win-lose there either.

Non-speculator, the ones converting their purchases out of the market, are the ones that sustain and drive this circle of life called forex market.

My take on why retail speculators lose consistently is due to not trading consistently. and also that trade over-leverage not being able to hold positions long enough


J.

[HannesJoubert]

Hmmm, some good points being made here. I have come to the conclusion, so far, that there are a myriad things that could trip a trader up. Some of our own making, some from broker shenanigans, even more from market manipulation.

It really is a difficult career choice, for me at least

H

:hi: