Why Traders fail?

What separates winning traders from losing traders is not their strategies or their smartness or their market analysis. It is the traders mind set, which distinguishes a successful trader from a losing one.

Successful trading is difficult and building the correct attitudes and beliefs is the way to develop the habits and skills necessary for profitable trading. We have to train our psyche to be successful.

The reason is quite simple, there is always resistance to change in everything you do and trading is the same. It doesn't matter what field you are in there will always be a bottom 10% a top 10% and the middle group. The ones that have the best mind set will rise to the top.

Most of us who have traded are intelligent, having a well-designed system with good strategies and still lose money. Why?

Successful traders who win consistently have developed an appropriate mind-set to trade. This enables them to be consistent winners. To be a winner a trader has to develop certain belief systems, attitudes and psychological characteristics.

 

Reasons for traders failing:

1. Not comfortable with taking risks. Cannot come to terms with losses.
2. Never adapt too quickly to changing market conditions.
3. Not disciplined to objectively trading the markets.
4. Always thinking about their last trade.
5. Never operate with money management rules.
6. Have no trade management rules in place once the trade is commissioned.
7. They are not flexible.
8. Try and predict the market and act according to prediction and not upon the actual moves the market is making.
9. Never have an established routine.
10. Never keep records.
11. Do not have a process in place.
12. Risk to reward ratio is all over the place.

The Holy Grail of trading: Success favours a prepared mind.

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