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Why Most Traders Lose
Most traders lose money. That is the truth and when I say that I mean long term some traders may have a profitable stretch but in the end they lose. I have heard it said many times 95% of traders will lose and just do the opposite of them and you can have success. That is not quite as easy as it sounds. I think the first thing you must do is to identify what actions they are doing and do the opposite of that. In this article I attempt to examine exactly what the losing traders are doing. So that we will be able to know exactly how to do the opposite of them.
I made a list of key mistakes that 95% of traders make.
Most traders do not have a trading plan.
Most traders do not practice money and risk management.
Most traders do not have discipline to follow their plan (if they even have one.)
Most traders do not have a strategy. Most traders do not use stop losses or have profit targets.
Most traders do use a good risk to reward ratio (keep losers small and winners big.)
Most traders do not control fear and greed.
Most traders allow their emotions to control their trading.
The number 95% is not completely accurate, however that is not the point. The point is most the list tells you why 95% of traders lose. Each one of those point is critical in trading success.
The first item on this list developing a trading plan is the first item that a trader should focus on when deciding how they want to trade. A trading plan is important because a plan guides everything you do in your trading. If you have no plan the trader has nothing to base their actions on and they are entering and exiting trades with no idea of objectives. When trading like that it is guaranteed that there will be more losses in your account and not only that but a total loss of account. What I mean by that is the trader will experience the dreaded margin call which is where the broker will completely close the account because the trader over traded. When that happens all of the traders hard earned money is gone and when that happens you can't get it back.
You as trader should not even begin to trade until you have developed the entire list and have practiced it on a demo account with success. If you just take this list and do these things that most traders do not and you will be on the right track.
About the Author Casey Stubbs is a Forex Trader that publishes a web site dedicated to educating traders for success. He has a daily trading blog, an interactive trading school, trading tutorials, articles and more. Forex Trading School His web page is Winners Edge Trading
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