Why the 95% failIt's no secret that over 90% of retail traders lose money. I am not talking about throwing some money into crypto and hoping for the moon type wins or losses. I mean actually trading and making a living from it.
You see, when you start, you are hungry for information - what's the best course, who has the best strategy, what if I trade 25 instruments on a 1-minute timeframe. Surely more profits...
After doing this for over 25 years, you get to see people come and go, sometimes they come back with a new idea and more funds to give the market.
But overall, some of the core problems are - all the gear and no idea.
Not only do people invest in screens, the latest hardware and of course the legendary Bloomberg subscription for 24/7 news.
What about indicators?
Has your screen ever looked a little bit like this?
The issue with more indicators is the majority of them lag to price action, re-paint or are simply not needed. Then combine that with the lack of experience, and you are left questioning do I buy or sell if my RSI is up but the moving average just crossed down?
You are not alone, most traders have been there if not all!
It is hard enough when even the brokers and exchanges fight against you - have you ever seen a scam wick directly to your stop and bounce?
What about the A-book vs the B-book?
In an A-book model, the broker passes their clients' trades directly to the market. Essentially, the broker acts as a middleman, executing trades on behalf of clients in the open market. This means that the broker's profits come primarily from commissions and spreads rather than trading against the client.
B-book, the broker takes the opposite side of the client's trades, essentially acting as the counterparty. Instead of sending trades to the open market, the broker keeps them internally.
The next one that always tickles me is the 100% win rate strategy that someone automated and for a few hundred dollars, it's all yours!!
Look, if there was a silver bullet, a 100% winning strategy you could buy off the shelf - we wouldn't have any other profession on the planet! The world's population would be professional traders. You know the saying " if it sounds too good to be true, it probably is".
You see Elliott waves where they have no right to be. Simply no logic or using them on a tick chart and hoping for miracles.
How about getting some financial advice from a spotty teen who rented a sports car for a video shoot this afternoon? Yeah, sounds like a good plan to help you retire young!
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So, how to avoid all of these things?
Well, to start with, your tradingview chart, on a regular laptop or desktop with one screen, removing all the indicators and increasing the timeframe.
Then you reduce the number of pairs you look at and get to know them. Treat them like a new language. Learn the character traits, how they behave around major news events, what happens to them if the dollar goes up or oil drops 5%.
Don't treat trading like a game.
Instead, treat it like a business, use hours that suit your lifestyle. Deploy proper risk management. Don't see it as a one trade one win type concept. Treat it with respect and profit from it weekly.
You will find, when you learn to manage risk correctly, you care very little about markets going up or down. You tend to sleep with ease and a growing bank balance.
The market has plenty of soldiers fighting on its side, and it does its best to recruit you to fight against yourself!
In summary, less screens, less data inputs (indicators), less instruments, higher timeframes, ignore the influencers, Proper risk management and learn to understand there is no silver bullet.
Trading is statistics and that's all it is.
You can be very profitable with a low strike rate and a large risk-to-reward ratio. Or as simple as a 2% gain per 1% loss and a 50/50 win rate still makes you money!
Disclaimer
This idea does not constitute as financial advice. It is for educational purposes only, our principal trader has over 25 years' experience in stocks, ETF's, and Forex. Hence each trade setup might have different hold times, entry or exit conditions, and will vary from the post/idea shared here. You can use the information from this post to make your own trading plan for the instrument discussed. Trading carries a risk; a high percentage of retail traders lose money. Please keep this in mind when entering any trade. Stay safe.
