Why Retail Traders Fail?


There are various reasons….
and it´s not because of the reasons you think it is.

It´s not because Trading is Rocket Science. That´s a fact!

Trading is not Rocket Science. This said, it does take time, and whilst there is no University Degree that will prepare you to be a profitable Trader, there are similar studies that have to be taken and absorbed to make it to the Pro Ranks.

There´s certainly no Holy Grail either, get over it, start living with the facts.
Trading is simply a zero sum game that has to be treated like a business, just like any other business. Every single Trader has a business of his own, he must manage it efficiently and effectively, just like any other business.

Retail Traders generally fail for categoric reasons. They are:
  • They are under capitalized
  • They trade LIVE far too quickly.
  • They have no real idea what they are doing
    (Even though they think they know what they are doing)
  • They jump around with “trading ideas” constantly
  • Get confused with multiple flashing guru indicators
  • They think too much, think some more and then make confused decisions
  • They worry about a loss then watch profitable trades go by whilst “sidelined”!

Understanding what´s going on.

Learning to Trade is challenging, that´s a fact – One of the problems that initially faces the new “Learn from Home Retail Trader” are all the roads that he or she can take to learn to trade with the thousands of resources on the Internet. It´s true to say that some Traders live with non-profitability for years because of this, even decades, most of course give up much quicker, but however long their persistence lasts, they trip around on the internet moving from one route to another, picking and clutching at straws, chopping and changing with the newest latest indicator (of which they already have multiple versions on their charts) – BIG MISTAKE, but a road that many take.

What do you think Professional Institutions do with their trainees?

Unless you are already consistently profitable the best thing you can do for your trading today is to stop trading live. Why would you risk and throw money at the market when you are not yet in a state of consistent profitability? I don’t mean yesterday you may a bit of money so you can now be sure it´s “ok to go live”.. I mean on a consistent basis, over months, not over days, everyone has loss days, when you start getting loss weeks and loss months then you need to be revising what´s going on. I´ve lost count of the times people have said “but i always make money in simulation, bucket loads of it”… bla bla bla – It´s a bullshit statement, mostly filled with excuses when the right questions are posed in response – Most people who say this don’t even know the reason they took their last 3 trades, let alone the last 50…… If you don’t know exactly why you have taken your trades, then YOU AREN´T READY! If you are one of these characters that always make bundles of money in simulation and it is so different when you go live then its simple to pinpoint the problem – You either don’t have any management or a plan, your mindset is totally fried and you can’t cope with real money on the line, or you are just winging it when in sim, not managing risk, adding on, using too much size, not being realistic etc etc etc – If you have a real plan, real discipline, real time and practice behind you, and a strong mindset, then your Trading will speak for itself over the long term. What do you think Professional Institutions do with their trainees? Let them loose with a few million to play with, just to see if they can do it. Just think about it logically please, because unrealistic ambitions will just hinder any progression you are already struggling to make. YOU HAVE TO look at it logically and apply similar principles to your home learning process, the same kind of learning process that your competitors are receiving in the Professional Institutions. You are already at a disadvantage to them, why do you ignore the signs and continue to blindly throw money at a market that has only taken from you?

Secondly, take all those indicators off your charts, they are blinding your view of the actual technicals you should be analyzing – Price Action. Go back to bare candle charts, stop cluttering your charts and mind with superficial indicators that will only hinder your Trading. No indicator is ever going to make you profitable, they can aid chart reading when knowing how to properly utilize them, but thinking some red here green here indicator is going to work is just going to send you down the path of frustration and loss. Clean charts are the only way forward, believe me. Do you think that the Professional Institutions stick an indicator onto a Trainees chart and tell him to blindly follow it for his route to profits….
Please Think Again

Do you know how orders transact against each other to cause price to tick? Why not?
That´s like a car mechanic not knowing why an engine has oil…

Learn how the market actually functions. Do you know how orders transact against each other to cause price to tick? Why not? That´s like a car mechanic not knowing why an engine has oil. Seriously, get to grips with the game you are playing, because not knowing will simply hurt your progress. Order flow is important, from the lowest increment, i.e.: “The Tick”. I can’t tell you how many newer Traders I have asked over the years, but the fact is that virtually none of them knew exactly how the bid and ask work in reality. Learn it, and learn it well, watch the DOM for significant amounts of time. Did you know that trainee Traders in certain Proprietary Trading Houses are often told to sit and watch the DOM for weeks until something clicks… they aren’t allowed to watch a chart until they can read the DOM – They do this for a reason, they don’t just let their Traders loose with a live account to see if they can make it…. Why do you do this with you own account?

Trading gets pretty boring when you get into a profitable state, sure it can get pretty wild and exciting too, but in general for a lot of professional Traders there is a lot of sitting around and waiting. You’ll find it´s mostly a waiting game, its certainly part of the strategy we employ, strategically stalking certain higher probability setups. We can all raise our game and get more aggressive, and of course even the best of us gets impatient on occasion, all I know is that if I do get impatient, it usually costs me money! I try to remember that every time I am grinding my teeth because I want to get a trade on and end the monotony.

THERE ARE serious opportunities for those that wish to focus, energize and partake – Opportunities I wish I had known about when I was starting out, opportunities that I wish I had even 3 or 4 years after starting out on my Trading adventure – Those that embrace the opportunity will flourish and do well – Some will likely find that Trading doesn´t actually suit them and they decide to do something else – This happens, think about people who graduate as a Lawyer only to take on a different career path, or think of those who get years through a dedicated career University Degree only to find out “it´s really not what they want” – Trading is no different, those of you who think that all you need to do is read a few pages of a book then you can go picking the low hanging fruit that the Pros are all leaving behind for you – THINK AGAIN – Because the Pros are taking all the low Fruit, and more, don´t ever believe anything else… Either become a real Professional yourself or inevitably curl up and wither away into the “Trader That Once Was”.