The reason that new traders fail that doesn't involve psychology
Member Since Sep 06, 2013
137 posts
Apr 16, 2015 at 10:28
90% of traders fail... everyone knows it.... but WHY?
Most people put it down to psychology, or system chasing etc .... but I propose there's another reason, one that probably applies to most new traders:
FUNDAMENTALS....
Without Fundamentals you are gambling... trading on the CHANCE that a pattern if traded enough will eventually win....
With Fundamentals you are INVESTING.... there;s a big difference... sure you enter and exit markets technically as you need a consistent method for actually trading, BUT if you do so BASED on fundamentals when choosing a pair you will do far far better!
In fact ill make a controversial statenment:
You simply cant make a regular, long term, sustained profit from Forex without some basic fundamentals being applied to at least choosing your trading pairs and direction. Today's blog explores this statement in more detail: What do Fundamentals Mean to Trading, and WHY are they so VITAL?
In the blog I included a Youtube video that's shows you how and why the moves following last nights Aussie news were 100 pips stronger on the EURAUD compared to the AUDUSD....
Its entry level stuff that will make a big difference.
https://fxnewstrader.co.uk/blog/blog/what-do-fundamentals-mean-to-trading-and-why-are-they-so-vital
Most people put it down to psychology, or system chasing etc .... but I propose there's another reason, one that probably applies to most new traders:
FUNDAMENTALS....
Without Fundamentals you are gambling... trading on the CHANCE that a pattern if traded enough will eventually win....
With Fundamentals you are INVESTING.... there;s a big difference... sure you enter and exit markets technically as you need a consistent method for actually trading, BUT if you do so BASED on fundamentals when choosing a pair you will do far far better!
In fact ill make a controversial statenment:
You simply cant make a regular, long term, sustained profit from Forex without some basic fundamentals being applied to at least choosing your trading pairs and direction. Today's blog explores this statement in more detail: What do Fundamentals Mean to Trading, and WHY are they so VITAL?
In the blog I included a Youtube video that's shows you how and why the moves following last nights Aussie news were 100 pips stronger on the EURAUD compared to the AUDUSD....
Its entry level stuff that will make a big difference.
https://fxnewstrader.co.uk/blog/blog/what-do-fundamentals-mean-to-trading-and-why-are-they-so-vital
HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
Apr 17, 2015 at 00:05
BenNathanFTA posted:
Without Fundamentals you are gambling... trading on the CHANCE that a pattern if traded enough will eventually win....
I agree with your statement here - a pattern 'may' mean something but doesn't overide sentiment/news/fundamental changes.
Member Since Sep 06, 2013
137 posts
Apr 17, 2015 at 07:26
If you were buying a horse to race, would you buy it for its looks or buy it based on its upbringing, bloodlines, genetics and breed quality?
Or buying a company - would you buy it based on its name , or its performance history and investigatory.
You won't find a top performing Wall Street trader buying into a stock or currency based purely on a chart pattern, they know why and what caused the pattern .
Basically all technical strategies will on many occasions go against the base fundamentals , so trading in line with fundamentals cuts these kind of losses out and greatly increases profitability. That's the edge
Or buying a company - would you buy it based on its name , or its performance history and investigatory.
You won't find a top performing Wall Street trader buying into a stock or currency based purely on a chart pattern, they know why and what caused the pattern .
Basically all technical strategies will on many occasions go against the base fundamentals , so trading in line with fundamentals cuts these kind of losses out and greatly increases profitability. That's the edge
HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
Member Since Jan 22, 2015
67 posts
Apr 17, 2015 at 20:17
How the hell will you know if you are going against the fundamentals, if you don't know them first.
Member Since Sep 06, 2013
137 posts
Apr 18, 2015 at 08:31
There are plenty of things out there to help.
Bloomberg is a good source of free information to keep in touch.
Talking-Forex is decent as they give you daily market wraps.
I use a service called Ransquawk more than anything but they are pricey
Bloomberg is a good source of free information to keep in touch.
Talking-Forex is decent as they give you daily market wraps.
I use a service called Ransquawk more than anything but they are pricey
HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
Member Since Apr 10, 2015
29 posts
Apr 18, 2015 at 19:46
Well, could be one of the reason but certainily not the Major reason why traders fail.
Member Since Nov 21, 2011
1718 posts
Apr 18, 2015 at 22:07
Forexmanager9 posted:
Well, could be one of the reason but certainily not the Major reason why traders fail.
Right!
Here is the only reason:
https://chatwithtraders.com/ep-015-joel-kruger/
'Trades based on Technical analysis = Gambling, Trades based on Fundamental Analysis = Investing!'
Scalping: minutes to hours
Day trading: hours to days
Swing: days to weeks
Investing: months to years
each trading style will be suitable depending on personnalities. I know traders that scalp the trends (fundamental outlook) based on Technical Analysis, why would they be gamblers?
Member Since Nov 21, 2011
1718 posts
Apr 18, 2015 at 22:15
BenNathanFTA posted:
In the blog I included a Youtube video that's shows you how and why the moves following last nights Aussie news were 100 pips stronger on the EURAUD compared to the AUDUSD....
This is purely technical.... It's called Relative Force. You can checkout any news, EURAUD & GBPAUD will always move more than AUDUSD.
100% of time.
Member Since Apr 10, 2015
29 posts
Apr 19, 2015 at 14:49
CrazyTrader posted:Forexmanager9 posted:
Well, could be one of the reason but certainily not the Major reason why traders fail.
Right!
Here is the only reason:
https://chatwithtraders.com/ep-015-joel-kruger/
'Trades based on Technical analysis = Gambling, Trades based on Fundamental Analysis = Investing!'
Scalping: minutes to hours
Day trading: hours to days
Swing: days to weeks
Investing: months to years
each trading style will be suitable depending on personnalities. I know traders that scalp the trends (fundamental outlook) based on Technical Analysis, why would they be gamblers?
There can NEVER be JUST ONE REASON why '90%' traders fail bcoz those 90% includes thousands or possibly few million traders around the world. Everyone has different mindset and so does different trading style. A losing factor for few traders may not necessarily be the same losing factor for other traders.
Some lose bcoz of high leverage and at the same time there are traders who win using high leverage bcoz they know how to CORRECTLY and EFFECTIVELY use it. Losing Factorsssss purely differs from trader to trader.
So just wake to the fact that THERE CAN NEVER BE ONE LOSING FACTOR though there can be one major factor.
Member Since Nov 21, 2011
1718 posts
Apr 19, 2015 at 19:24
You can use caps if you want lol.
You guys are always saying things without any proofs.
Show me any live account with leverage below 1:10 that fails... then I may think leverage isn't the only one reason. (Yes I may think because 1;10 it's still a leverage!!!
You guys are always saying things without any proofs.
Show me any live account with leverage below 1:10 that fails... then I may think leverage isn't the only one reason. (Yes I may think because 1;10 it's still a leverage!!!
Apr 20, 2015 at 06:44
I can also recommend RANSQUAWK here, using it with great success you just get instant news before anyone else so even if you are the best technical trader there is you still can make more money if you know what the big guys and they all use Bloomberg, do.
One good example was the surprise cut from Riksbank. The guy at Ransquawk was shouting in the mic and in 3 secs I had sold SEK for a huge profit just at the begin of the spike ...
One good example was the surprise cut from Riksbank. The guy at Ransquawk was shouting in the mic and in 3 secs I had sold SEK for a huge profit just at the begin of the spike ...
You have to become one with the market
Member Since Sep 06, 2013
137 posts
Apr 20, 2015 at 07:17
FxProfit1 posted:
I can also recommend RANSQUAWK here, using it with great success you just get instant news before anyone else so even if you are the best technical trader there is you still can make more money if you know what the big guys and they all use Bloomberg, do.
One good example was the surprise cut from Riksbank. The guy at Ransquawk was shouting in the mic and in 3 secs I had sold SEK for a huge profit just at the begin of the spike ...
I second this - i use RS to build my fundamental picture. I agree with this whole statement actually - nicely put indeed
HOLY GRAIL: Fundamental Analysis to chose your pairs/direction, Technical Entry/SL/TP for consistent Management of those decisions
Apr 26, 2015 at 17:05
(edited Apr 26, 2015 at 17:07)
Some interesting views here...
I always thought that the primary reason most traders (the 90%) fail is simply due to human emotions like Fear (too scared to enter a trade), Greed (wanting more profit or holding on to losing trades), Doubt (exiting too soon after entering), Anger/Revenge (revenge trading out of anger after losses), hope (holding onto loosing trades hoping the market will turn), incompetence (not knowing what you are doing due to a lack of training and experience).... etc.
I am a technical trader, but I do believe that fundamentals play a part in what drives the markets. So it makes sense to keep tabs on fundamentals so that you can determine if there will be follow-through after that 'break' you are waiting for. But I must admit, I don't place a huge emphasis on fundamentals by itself. Now don't get me wrong, I am not an 'indicator-trader' or 'systems-trader'). Tried them and found them to be rubbish in itself. I use old-school Price-action, Support & Resistance and Fib-levels to trade, and use fundamentals as a guideline to determine the bias and direction - the 'emotion' of the market participants.
So far my simple method has served me well. I am not going to be a millionaire overnight, but I sure am slowly working towards it.
So my point simply is this. No matter what you trade (Forex, Stocks, Options... etc.) or how you trade (manual trader, automated trading, investing, etc.), human emotion is still the basic force that drives our trading decisions. Oh and please don't start telling me EA traders don't feel emotion.... try running your EA on a live account and then tell me you don't still feel fear, greed, doubt or any of the usual emotions... been there, done that.... still emotions. Learn how to control your trading emotions, and you will soon become profitable....
Just my opinion...
I always thought that the primary reason most traders (the 90%) fail is simply due to human emotions like Fear (too scared to enter a trade), Greed (wanting more profit or holding on to losing trades), Doubt (exiting too soon after entering), Anger/Revenge (revenge trading out of anger after losses), hope (holding onto loosing trades hoping the market will turn), incompetence (not knowing what you are doing due to a lack of training and experience).... etc.
I am a technical trader, but I do believe that fundamentals play a part in what drives the markets. So it makes sense to keep tabs on fundamentals so that you can determine if there will be follow-through after that 'break' you are waiting for. But I must admit, I don't place a huge emphasis on fundamentals by itself. Now don't get me wrong, I am not an 'indicator-trader' or 'systems-trader'). Tried them and found them to be rubbish in itself. I use old-school Price-action, Support & Resistance and Fib-levels to trade, and use fundamentals as a guideline to determine the bias and direction - the 'emotion' of the market participants.
So far my simple method has served me well. I am not going to be a millionaire overnight, but I sure am slowly working towards it.
So my point simply is this. No matter what you trade (Forex, Stocks, Options... etc.) or how you trade (manual trader, automated trading, investing, etc.), human emotion is still the basic force that drives our trading decisions. Oh and please don't start telling me EA traders don't feel emotion.... try running your EA on a live account and then tell me you don't still feel fear, greed, doubt or any of the usual emotions... been there, done that.... still emotions. Learn how to control your trading emotions, and you will soon become profitable....
Just my opinion...
Keep it simple, be disciplined, get rich slowly and above all protect your equity!
Member Since Nov 21, 2011
1718 posts
Apr 26, 2015 at 17:45
JacoAF posted:
try running your EA on a live account and then tell me you don't still feel fear, greed, doubt or any of the usual emotions... been there, done that.... still emotions. Learn how to control your trading emotions, and you will soon become profitable....
Basically if you keep feeling emotions while account is run by EA... that means you are staring at screen. EA is supposed to run by itself so why don't you stop to look at the account? So if you are confident with your EA, there is no need to look at open trades every 5 minutes... therefore, EA avoids emotions only if it is well used.
Member Since Nov 21, 2011
1718 posts
Apr 26, 2015 at 19:53
(edited Apr 26, 2015 at 19:53)
It's always good to read:
https://www.tradeciety.com/how-to-deal-with-emotions-in-trading-ask-experts/
https://www.tradeciety.com/how-to-deal-with-emotions-in-trading-ask-experts/
Apr 27, 2015 at 06:44
(edited Apr 27, 2015 at 06:53)
Emotional management means almost everything in every domain, especially in trading.
Emotions like greed and fear are the worst and these can be managed. These emotions will never disappear, we have to live with them and control them.
Emotions like greed and fear are the worst and these can be managed. These emotions will never disappear, we have to live with them and control them.
Run after the system not for the profit!
