Thursday, November 29, 2012


Why do 90% of traders fail?

What is the key issue?  Probably many issues.

I think one main issue is clearly defined rules and consistency.

Rules are established and then it's easy to break them, frontrun your own signals in an attempt to get a better price or get out at a better exit.

Eventually, a trader is filled with uncertainty.  What do I do?  I'm afraid to act.  The trader is afraid of what the market will do. 

But no -- the trader is really afraid of what the trader will do.

Will I freeze this time and hold a huge loss? 

If you define your loss ahead of time and know what your signals are, what are you afraid of?

You will lose sometimes and win sometimes.  The market will always be uncontrollable so worrying about it is a waste of time.  And makes no sense.

You have to focus always on your plan. If you trust that you will act the same way every day.  Following systems, honoring stops, entering on clear signals, then the profits take care of themselves.

The seasoned trader probably does not think much about profits at all, especially during the trading day.

If you are struggling with fear/uncertainty.  Go back to your plan.  Can you clearly define it?  Can you explain it to another person? 

The uncertainty can be eliminated, but first you have to accept that it's coming from you, not the market.

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