The untold truth about why most traders fail

[TheSafeTrader]

I am new to this forum. I am a full time trader and former teacher. I want to discuss something which is rarely ever discussed in the context of trading.

Data from various sources show that 90% of traders are in loss or have failed. The various reasons given are lack of discipline, poor risk management, not having an edge etc.

But let's look a problem deeper than that - most people are not very good learners. If you teach mathematics to some students, will everyone become a math wizard? No of course not. Many will have difficulty understand the syllabus. For some it will take a long time to grasp the concepts. Other will fail the class or semester.

Yet in trading we just assume that people should just take courses and if they practice enough they will succeed. Well what if they have a learning disability? What if their logical reasoning abilities are not top notch?

I am consistently profitable. I can tell you trading requires strong logical reasoning abilities. Are you the type of person who has difficulty answering test questions like -

1. Which shape is not similar to other shapes?
2. What pattern logically comes next in this sequence?
3. Which number is missing in this sequence?

You see, trading requires interpreting things on a very dynamic and rapidly changing chart. Pattern recognition is not easy.

So what I am getting is, before you dive into trading real money, risk management or psychology, make sure you are learning like a top student. Try to take some free online non-verbal reasoning tests. See how you fare. And never let trading affect your mental health, it can be very hard on your psychology.

 

[bunti_k23]

Hello TheSafetrader,

First of all Welcome to traderji forum, this place is great to learn and evolve as a trader. Many seasoned traders are here in our forum. So in which segment you trade? what is your trading style, TF? etc....

 

[TheSafeTrader]

Hello TheSafetrader,

First of all Welcome to traderji forum, this place is great to learn and evolve as a trader. Many seasoned traders are here in our forum. So in which segment you trade? what is your trading style, TF? etc....

I am mostly a swing trader. I hold stocks a few days to few weeks. I also trade OTM stock options by allocating a small percent of capital for such trades.

I don't trade index options. Only use them for hedging.

 

[PrachiDua1]

Many traders fail due to a lack of discipline, emotional control, and a comprehensive understanding of risk management. Overtrading, ignoring stop-loss orders, and succumbing to greed and fear contribute to substantial losses in the volatile world of trading.

 

[bunti_k23]

Many traders fail due to a lack of discipline, emotional control, and a comprehensive understanding of risk management. Overtrading, ignoring stop-loss orders, and succumbing to greed and fear contribute to substantial losses in the volatile world of trading.

Very well said Prachi!!!

 

[Jessie]

I think this isn’t hidden that knowledge is the only barrier traders are mostly failing for.

 

[ReggieFx]

The market requires traders to have technical and fundamental knowledge but most of the traders don’t have the knowledge of these two analyses.

 

[Vmaster369]

Nothing best investing for 30 yrs lol Pick a great company that stays alive and is in profit for 30 yrs All set :xD

Nothing beats 1 yrs investing to Pick a new ipo company thats decent reasonable and business you understand then too all set

You make market as Gamble bazar by trading in option or intraday you will end up being hurt and injured.Follow the right path market will reward you. Right path is Equity delivery :xD

 

[Ravish Sinha]

The market requires traders to have technical and fundamental knowledge but most of the traders don’t have the knowledge of these two analyses.

Yes. buddy you are right that is why they failed to trade

 

[Manav Kole]

Most traders fail due to a lack of a structured trading plan, poor risk management leading to emotional decisions, and unrealistic expectations of quick profits without continuous learning and adaptation to market changes.