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7 Major Factors Why Traders Fail


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Pierre A Pienaar posted a new article “7 Major Factors Why Traders Fail”.

We see the global markets moving up and down; when China sneezes the world catches a cold, and people losing a lot of money, although there are some very smart traders making a lot of money. I thought that you should take a breather, not too long, and see where you failed or could have done better

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7 Major Factors Why Traders Fail

  1. 1. Resources for the Independent Trader Blog7 Major Factors Why Traders Fail“The best way to escape from a problem is to solve it.” ~ AlanSaportaDear Reader,We see the global markets moving up and down; when China sneezes the world catchesa cold, and people losing a lot of money, although there are some very smart tradersmaking a lot of money. I thought that you should take a breather, not too long, and seewhere you failed or could have done better.Research indicates that over 89% of traders will lose all their capital in the first year andmany more will be forced to 7 factors are the main culprits. I have been there, and Ibelieve if you fail, recognise your mistakes and move on, or don’t trade at all. Leave it toprofessionals, but since you are a professional and wish to kick-start your profitabletrading, or you wish to become a professional trader. It’s only concise, and the idea is tostop and and look and then lets move to the positives.
  2. 2. 1. Not Sticking to a Strategy - Most people think that theres always a better strategyso they jump from one strategy to another in the quest for the elusive holy grail. Justpick one strategy, learn everything about what makes that strategy work and master itbefore moving on.2. No Support or Mentor - Almost every well-known, successful trading professionalhas had the benefit of a mentor (even Warren Buffet credits Ben Graham as his mentor!).A good mentor speeds up the learning process, makes themselves personally availableto answer your questions and will provide you with strategies that will reduce yourchance of failure.3. Wrong Strategy - Just picking a strategy isnt enough. A winning strategy musthave a high probability, be time-tested and proven to work in all market conditions (up,down and sideways). I would like to include fear here as well.4. The Fear Factor - People with fear react out of their “normal” strategy, and makesirrational decisions. Losses will be even more if their current strategy is not probable.5. Time and Effort - Many new traders quickly scan through the rules of a strategy andinstantly begin trading (Compulsive trading, like gambling). Youve got to earn yourright to trade. In other words, take the time to understand the strategy, ask questionsand paper-trade before putting your hard earned money at risk. Even good traders arevictimised into lending their time and money in greedy transactions. Consequently, oncea trader has done this he gradually acquires a vested interest in his own errors and eventhough he finds more and more aspects of this kind of trade which run counter to hissensibilities, he tends to brush them aside rather than swallow his pride, and admit hemade an original mistake in judgement. Most humans are like that.6. Risking Too Much – This is one of the mostly the biggest sin. Traders is prone to toomuch per trade is the most common form of financial disaster. However, the differencebetween a rookie trader and a professional trader can be seen in their moneymanagement and position sizing strategy. Both people can trade the same strategy, butthe one with the best money management will increase their wealth the fastest.7. The Greed Factor – It falls in the same as above, but I want to add this as a“Mindset Problem”. This is where get even very good traders falling into the trap ofmaking money fast. You’ll also get the Madoff’s of this world, and the Rogue Traders inlarge corporations. They leverage huge contracts and then the markets change againstthem, then there is chaos, crisis, and major after-shocks occurring taking centre stage.So if youre still struggling to be successful, ask yourself just how many of thesemistakes youre still making?Only, when you return to be a disciplined trader, doesn’t matter if you’re a stocks, ETF’s,options, futures or Forex trader, you could be more successful. All “good traders” have atrading plan that is diversified in the various Asset Classes, and with intelligent research,knowledge, support, and actions ensure that risks are minimised and profits are higher.Don’t forget your coffee below, share with friends, and get back to me.Thanks for readingP.S. Next Article: What Do All Super Traders Have in Common? George SorosMade a Killing Last Week. Why?
  3. 3. Remember, Trade smart, not with GreedPierre A PienaarResources for the Independent Trader Blog A Pienaar retired in 2011 from business.I would like to share my passion, my interests, knowledge & experiencesin Forex, Options, Gold Investments, Futures, Stocks, Binary Options,Economics, Stamp Collection, Sports, Gardening, Reading, Photography,and PoliticsSubstantial risk of lossThere is a substantial risk of loss of stocks, forex, commodities, futures, options,and foreign equities are substantial.You should therefore carefully consider whether such trading is suitable for youin light of your financial condition. You should read, understand, and consider
  4. 4. the Risk Disclosure Statement that is provided by your broker before youconsider trading.